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What Is Margin, Leverage, and Equity?
What Is Margin, Leverage, and Equity?
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Written by William
Updated over a week ago

Margin is the amount of money required to open and maintain a trading position. It serves as collateral and ensures that you can cover potential losses. Margin requirements are set by your broker and vary depending on the size of your position and the leverage you use.

Leverage is a tool that allows traders to control a larger position size with a relatively small amount of capital. It is expressed as a ratio, such as 50:1 or 100:1, and determines how much you can control compared to your capital. While leverage magnifies potential of your strategies profits, it also increases the risk of your strategies losses and may impact your performance in our evaluations.

Equity represents the current value of your trading account, taking into account your open positions and their unrealized profits or losses. It is calculated as the account balance plus or minus any floating profit or loss from open trades. Equity reflects the real-time financial status of your account.

In our trading environment this is simulated however is representative of live market conditions

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