Private investors usually trade the forex markets on margin. This means that they lodge an initial deposit to their FX broker usually between 2% and 5% of the amount they wish to trade. If the investor's position starts to lose money the FX broker would normally 'margin' the client which is a request for more funds to cover the unrealised loss on the forex position.
Trading on margin allows the investors to have a much larger exposure to the forex market than would be possible if the investor needed to have the full face value of the amount to be traded. This brings greatly increase risks of significant losses but also makes possible significant profits.
Trading on margin allows the investors to have a much larger exposure to the forex market than would be possible if the investor needed to have the full face value of the amount to be traded. This brings greatly increase risks of significant losses but also makes possible significant profits.
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