6. Margin Trading
Another term you may hear is Margin trading. Margin trading can make you responsible for losses that are greater than the dollar amount you deposited. Many Forex currency traders will ask customers to give them funds, which they sometimes refer to as “margin.” These sums can be in the range of $1,000 to $5,000. That dollar amounts control a far larger dollar amount of trading and customers are not aware of this sometimes. So, in essence, do not trade on margin unless you fully understand what it means and what you are doing. You must be prepared to accept losses that can exceed the margin amounts you have paid.