What is fixed margin?
When trading Forex on margin, there can be a few ways to determine the required margin for a trade.
Fixed margin means that there is a fixed amount of margin required to open a trade.
- If margins were variable and if you were directly adhering to the 0.25% margin requirements (or 400:1 leverage) would cause margin amounts to change as market rates fluctuate. For traders, this would mean watching not only your trades, but monitoring frequently changing margin levels.
- We have learned that many clients like trading with fixed margins. Therefore, we add a slight cushion to the margin requirement to help alleviate daily or even weekly fluctuations. In most cases, the cushion we have added means that margin levels should not change more than once a month.