Margins are a hotly debated topic. Some traders argue that too much margin is very dangerous, however it all depends on trading style and the amount of trading experience one has. If you are going to trade on a margin account, it is important that you know what your broker's policies are on margin accounts, and that you fully understand and are comfortable with the risks involved. Be careful to avoid a Forex margin call.
These articles, on the other hand, discuss currency trading as buying and selling currency on the foreign exchange (or "Forex") market with the intent to make money, often called "speculative forex trading". XE does not offer speculative forex trading, nor do we recommend any firms that offer this service. These articles are provided for general information only.
The market then wants to trigger one of your pending orders but you may not have enough Forex free margin in your account. That pending order will either not be triggered or will be cancelled automatically. This can cause some traders to think that their broker failed to carry out their orders. Of course in this instance, this just isn't true. It's simply because the trader didn't have enough free margin in their trading account.
Now, let’s say you open a trade worth $50,000 with the same trading account size and leverage ratio. Your required margin for this trade would be $500 (1% of your position size), and your free margin would now also amount to $500. In other words, you could withstand a negative price fluctuation of $500 until your free margin falls to zero and causes a margin call. Your position size of $50,000 could only fall to $49,500 – this would be the largest loss your trading account could withstand.
Borrowing money to purchase securities is known as "buying on margin". When an investor borrows money from his broker to buy a stock, he must open a margin account with his broker, sign a related agreement and abide by the broker's margin requirements. The loan in the account is collateralized by investor's securities and cash. If the value of the stock drops too much, the investor must deposit more cash in his account, or sell a portion of the stock.
In particular I would like to make the system a lot faster, since it will allow parameter searches to be carried out in a reasonable time. While Python is a great tool, it's one drawback is that it is relatively slow when compared to C/C++. Hence I will be carrying out a lot of profiling to try and improve the execution speed of both the backtest and the performance calculations.