Margin trading refers to the use of funds borrowed from a broker to purchase a larger amount of financial products. Traders use margin to purchase products that exceed their existing funds (or economic capacity). Then use margin to build leverage, conduct larger transactions or open larger orders to expand returns.

What is Margin?

Margin can be regarded as the guaranteed funds required to open a position and maintain order. This is not a fee or transaction cost, but an account reserved funds and allocated as part of the margin deposit. Margin is usually displayed as a percentage of the order specification (for example, 2% or 5%).

What are margin, margin level and free margin?

What is Leverage?

Using leverage allows you to use relatively small funds for larger transactions. Leverage allows you to hold orders that are much higher than the funds deposited in your account, usually displayed as a ratio.

At Eightcap, all trading accounts are initially set with leverage of 100:1 as the standard-setting, and customers can choose to change the leverage ratio from 1:1 to 400:1.

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How does Leverage work?

If your account leverage is 1:1 and you want to use $1,000 as margin in a transaction, then you will have a base currency of $1,000 ($1,000) = 1 x $1,000 = $1,000 (transaction value).

If your account leverage is 100:1 and you want to use the same margin ($1,000) in the same transaction, then you will have a base currency of $100,000 ($1,000) = 100 x $1,000 = $100,000 (transaction Value).

How to open an account with EightCap?

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How to change the leverage setting on EightCap?

If you want to change the leverage ratio on your Eightcap trading account, the process is very simple. You can submit an application through the “Management Center” or send an email to global@eightcap.com by mail .

Again, a higher leverage ratio may not be suitable for every trading method. If you want to trade with a higher leverage ratio, please remember: leverage is a double-edged sword. It can help to open larger trading specifications, but it also magnifies the profit and loss.

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What you should know about Leveraged trading

Using leverage can magnify the returns of foreign exchange transactions. Using leverage means that the currency value you can invest is 100 times or more times the actual investment value.

However, if the trend of the base currency of one of the transactions is unfavorable to you, the leverage in foreign exchange transactions will magnify your losses, and these losses may quickly add up, and if there is not enough margin in your account, you Will bear these losses and turn them into risks, and become actual losses.

Please remember that it is the customer’s responsibility, not ours, to continuously monitor the order and cover the position when the margin is insufficient.

EightCap’s trading platform has a built-in stop loss system that can monitor and control risks in real time. If your account equity is lower than the margin requirement, a “margin call” warning will appear, reminding you that there is not enough equity to support open positions – please note that this does not guarantee that the balance will not become a negative number, transaction execution depends on Market liquidity and pricing.

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How to read the candlestick chart?

Charts are very important for effective trading and correct interpretation of market data. Traders have the opportunity to use various charts and indicators that best suit their needs. A clear design and easy-to-read chart can help traders continue to increase trading opportunities in the foreign exchange and CFD markets. The most popular candlesticks can be found in MetaTrader 4. Candlesticks form various patterns, which can help traders confirm different market trends and make better trading decisions.

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