What is Margin? Margin is the amount of money needed as a “good faith deposit” by percentage to open a position with your broker which means the broker will calculate the maximum leverage depending on the margin amount in thetrader’s account.
For example a trader deposits 10,000 dollars into the account with leverage 1:25 and the broker had set the margin at 2%.
The trader buys 1 lot of EUR / USD at 1.
1776 1 lot 100,000 units times by 1.
1776 equal 117,760 dollars 2% of 117,760 dollars equal 2355.
Thus, the trader must have 2355.
2 dollars in the account in order to keep an open position.