BR Trading

How to use margin calculator?

You can now calculate the margin requirements based on the contract size you choose. The reserved margin is the amount that the broker reserves from the client's account to execute the trade based on the desired contract value and leverage. Keeping in mind that the method we follow in calculating margin is the method followed by most trading brokers, so you must confirm the method followed by your own broker.

Concept of leverage and margin:

Leverage is a facility provided by brokerage firms that enables investors to trade with a multiple of their account size. For example, if a brokerage offers 100:1 leverage, it means the company allows the investor to trade with an amount equivalent to 100 times the original trade size in the market. In return for providing leverage, the brokerage firm holds a portion of the investor's account as margin. This margin is used as collateral to enable the investor to utilize leverage. For instance:With 100:1 leverage, if an investor wants to purchase a mini trading contract worth $10,000, the required margin would be a fraction of that amount.The percentage of margin required changes based on the leverage ratio; the higher the leverage, the lower the margin required, and vice versa.

Important terms for margin trading:

If the price surpasses the retracement levels without bouncing back, the ongoing price movement is likely not a corrective move but a directional one that will continue. Typically, if the price exceeds the 78.6% level without ending the correction, it suggests that the movement is not a correction but a new trend. In such cases, the price continues its direction beyond the 100% level, representing the starting point of the trend and the drawing. However, how far can the price extend after surpassing the 100% level? This is where Fibonacci extension levels come into play. The percentages (127.2%, 161.8%, 261.8%) are the expected levels where the directional movement might stop and start a correction. Thus, these levels are considered support and resistance points that can be relied upon when the price reaches them. Using Fibonacci retracement and extension levels effectively can enhance your trading strategy by providing reliable points to enter or exit the market, improving your overall risk management and decision-making in the financial markets.