Trading on a margin can have varying consequences. It can influence your trading experience both positively and negatively, with both profits and losses potentially being seriously augmented. Your broker takes your margin deposit and then pools it with someone else's margin Forex deposits. Brokers do this in order to be able to place trades within the whole interbank network.
GAIN Capital recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets. 
Inflation Rates: Countries with inflation rates that are lower than other countries experience increased currency values. These increases mean that the purchasing power has also increased. The country that previously spent $1 million for 10,000 units of a foreign product is now able to purchase 18,000 units with the same $1 million, or $750,000 for the same 10,000 units. High inflation rates mean that there will likely be depreciation in the value of the currency.
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.
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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.
Currency trading, often referred to as foreign exchange or Forex, is the purchasing and selling of currencies in the foreign exchange marketplace, done with the objective of making profits. It is referred to as 'speculative Forex trading.' Forex trading is the largest market in the world, with nearly $2 trillion traded on a daily basis, with quick growth projections. The main factor that differentiates currency trading from other types of trading is its liquidity.
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.
Open positions are required to be fully margined at all times. FOREX.com does not engage in margin calls; you are responsible for monitoring your account and maintaining 100% of required margin at all times to support your open positions. To help limit your trading losses and ensure that your losses never exceed your account balance, our systems monitor your margin in near real-time and will automatically close out your open positions if your account equity falls below the 100% margin requirement. While our 100% margin requirement and near real-time margin system is designed to limit your trading losses and help ensure that total losses never exceed your total account balance, you do risk incurring losses greater than your account balance, especially during periods of extreme market volatility. While it is not FOREX.com’s policy to hold clients responsible for modest negative balances, we do reserve the right to hold clients responsible for large debit balances and when special circumstances apply. For this reason, we strongly encourage you to manage your use of leverage carefully. Increasing leverage increases risk.
Back tests – You can read my forex robot reviews to see if the forex robot has back tests which will give you a good idea how it performed historically, some forex robots even back test as for as 15+ years! Ideally, you would want back tests to have been done using real tick data and spreads, thus making the forex robot back test results as accurate as possible in the mt4 strategy tester
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