What is a CFD Margin Trading Account?
A CFD Margin trading account is an account that allows cfds traders to control a large amount of cfd trade transaction using little of their own capital while borrowing the rest from their cfd broker.
What's CFD Margin Trading Account?
Obtaining this margin account will enable you as a trader to borrow money from your cfd broker to trade cfd with.
The amount of borrowing power your cfd account gives you what is called " cfd leverage", and is usually expressed as a ratio - a ratio of 100:1 means you can control resources worth 100 times your deposit - cfd leverage 100:1 means you can borrow 100 dollars from your cfd broker for every $1 dollar in your cfd trading account.
What this means in CFD terms is that with 1 % margin in your cfd account you can control one standard lot or 1 contract worth $100,000 with a $1,000 deposit.
However, Trading this cfds account increases both potential for profits as well as losses. In CFD you can never lose more than you invest, losses are limited to your deposits & usually brokers will close a trade which extends beyond your deposit amount by executing a margin call. CFD traders must therefore try to keep their margin requirement level above that required. By using cfd money management rules & keeping your used cfd leverage below 5:1.
To Learn & Know More about CFDs Leverage & Margin - How Do I Read the Topics Below:
CFD Leverage and Margin Tutorial
