FOREX: Bad Credit Not an Obstacle to Trading on Margin

Understanding Forex margin is essential if you plan on getting involved in trading the market. Brokers will extend margin to you in your trading account unit you have bad credit. Here are a few things to consider about how and why they do this.

Forex Margin

Whenever you open a Forex account, the broke are is going to give you the ability to trade with margin. Whenever you open a standard account, you will typically get 100 to 1 margin. Whenever you open a mini account, you will be able to get margin that is 200 to 1. The broker is not going to check your credit or look at anything else in order to determine if they extend this margin to you.

Reasoning

The reason that Forex brokers extend large amounts of margin to every customer is because that it is necessary in order to profit from this market. When you are trading the Forex market, you are hoping to take advantage of very small movements in the exchange rate between two currencies. The exchange rate is only going to move a fraction of a percent in most cases. If you are going to take advantage of these movements, you have to be able to control large amounts of money.

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