Margin Trading

FOREX FX market participants can transact and trade on the market, using the insurance deposit, that is engaged in so-called margin trading. Margin trading consists of two stages: first, sell the currency (or buy) at one price and then buy (or sell) at a price.The first transaction is called opening the position, the second - the closing position. When the party opens the online FOREX trading currency market position, it does not make delivery of currencies in reality, and makes a deposit insurance guaranteeing compensation for losses. Once the position is closed, the deposit goes to the participant in the market back. Recalculates the profit and loss.They usually make up the equivalent amount of deposit insurance.However, deposit insurance can be much less than the amount used by a party for the opening position.

Let us consider in detail the stages of margin trading: eg., According to forecasts the Canadian dollar will strengthen its position in relation to the U.S. dollar. You buy a cheap Canadian dollar and are going to sell it more expensive after the price increase. Thus, opening the position will be buying the Canadian dollar, and by closing - follow it for sale.