In the global forex and CFD (Contracts for Difference) markets, understanding margin requirements and trading rules is crucial. This article will explain the regulations and important information about FXTM on its MT4 and MT5 platforms.

FXTM does not offer services to residents of the following regions: the USA, Mauritius, Japan, Alberta, British Columbia, Quebec, Saskatchewan, Haiti, Suriname, the Democratic Republic of Korea, Puerto Rico, and the Occupied Area of Cyprus.

Margin Overview

"Margin" refers to the amount of money required to open a new position, while "Available Margin" is the amount of funds available in your account to open additional positions. It's important to note that margin is not a commission but a form of collateral for trading forex and CFDs.

Margin requirements are influenced by several factors, including the product being traded, the leverage ratio, the trade volume, and market conditions. On the MT4 and MT5 platforms, traders can view real-time information on margin, available margin, and the margin currently in use.

Margin Calculation Formula

On the FXTM trading platform, margin requirements can be calculated using the following formula:

$\text{Margin Requirement} = \frac{\text{Current Market Price} \times \text{Trade Volume}}{\text{Account Leverage}}$

For instance, if the current market price for EUR/USD is 1.35645, your account leverage is 1:400, and you intend to trade one standard lot (100,000 units), the margin calculation would be:

$\frac{1.35645 \times 100,000}{400} = 283.91 \text{ USD}$

In this scenario, to open a position of this size, you would need at least $283.91 of usable net equity in your account.

The higher the leverage ratio, the lower the margin requirement. For example, if you select a leverage ratio of 1:1000 for your FXTM MT4 account, your margin requirement will decrease by 1000 times.

Consequences of Not Meeting Margin Requirements

If your account does not have sufficient available margin, you will not be able to open new positions. Additionally, if the margin level on FXTM's MT4 drops below 50%, the system will automatically trigger a "Margin Call," closing all open positions.

In extreme cases, if market fluctuations cause the losses on stop-out positions to exceed your account balance, your account balance may turn negative. FXTM provides Negative Balance Protection (NBP) to ensure you are not liable for losses exceeding your account balance.

To avoid the risks mentioned above, it is advisable for traders to closely monitor their account's margin levels and market conditions. Managing margin and leverage ratios effectively is a key strategy for successful trading.

For more details on FXTM's trading conditions and services on the MT4 and MT5 platforms, please visit their official website.