“Account Details

 > Explanatory Article by Marios Kyriakou, MSc Economics


About the author: Marios Kyriakou has a bachelor’s degree in Economics from the University of Cyprus and a master’s degree in Economics from the University of Warwick. He is also a holder of CySEC’s Advanced Certificate in Financial Services Legal Framework and a professional in Online Trading, Forex and CFDs with more than 7 years of experience.

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<Last updated 25.04.2020>

Dear reader,

Hi! If you are interested in Forex please read carefully the below article that helps you understand the trading account details.

 

Understanding Account Details

When an account is opened with any broker a client has the following items that he must understand fully before taking any type of trade.

Balance – The amount of money you have in your account when there is no open position. If you deposit $10,000 this will remain unchanged until a position is taken. It is affected by closing positions (realizing Profits/Losses), deposits and withdrawals.

Equity – This is your account balance plus/minus your open Profit/Loss (P/L). Fluctuates based on open positions. When there is no position, open balance and equity are the same!

Margin – Calculated based on leverage. Margin is the amount of money that is secured for a position or trade.

Free Margin – Is the difference between your account equity and the margin of your open positions or simply Free Margin = Equity – Margin.

Margin Level – Is the ratio of equity to margin. In other words: Margin Level = Equity/Margin x 100% 

Stop-Out Level –Calculated and implemented by company, ranges from 10% -50% of balance. It Is where deals will begin to be closed automatically because the margin level has fallen below the stop-out level.

This happens when equity decreases by increasing losses or if the client over exposes themselves by opening too many positions which increases their margin.


 

“I hope I am clear on this one. If not, contact us on social media and we will do our best to help you.

Thank you for reading my articles and watching my videos.”

Marios Kyriakou

Disclaimer: This article is intended for educational purposes only and does not replace independent professional judgement. Its purpose is to act as a complementary educational service to society, promoting personal development and social, economic and cultural progress of citizens. While this content has been prepared in good faith, no representation or warranty, express or implied, is or will be made and no responsibility or liability is or will be accepted by the creator to the accuracy or completeness of the information presented or any other written or oral information made available to any interested party and any such liability is expressly disclaimed.
Risk Warning: Trading in Forex and Contracts for Difference (CFDs), which are leveraged products involves substantial risk of loss as there is considerable exposure to risk in any off-exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of the markets that you are trading. You should carefully consider your investment objectives, level of experience and risk appetite before making a decision to trade with us. Most importantly, do not invest money you cannot afford to lose. It is possible to lose all the initial capital invested.

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