The ICMarkets foreign exchange trading market is increasingly vibrant. With the mission of providing convenient and high-performance trading experiences, ICMarkets has received the attention and acceptance of a large number of investors. One of the important terms you need to know when participating in trading at Learn Forex Trading is ICMarkets Margin. Let’s refer to the information below to better understand the role of the above concept!
What is ICMarkets Margin?
This is the deposit amount you need to bet with ICMarkets to use trading leverage. Traders are required to use leverage to have the right to buy and sell financial assets with a small amount of capital. This margin is calculated as a percentage of your equity.
Leverage will indicate how many % of the transaction value the trader needs to deposit. Using Margin at ICMarkets can help you increase profits. But besides that, it also brings risks if you do not have good management of your trading orders on the exchange.
Margin levels on ICMarkets Account types
ICMarkets has different margin levels depending on each different account type. At this exchange, traders are provided with 10 different leverage levels with a maximum leverage of up to 1:1000. There are 3 types of ICMarkets accounts with specific margin levels as follows:
- The Standard account has a minimum deposit of $200, supporting over 64 currency pairs. Spreads from 1 pip are allowed and the leverage is 1:500. Traders do not incur commission fees.
- True ECN accounts have a minimum deposit of $200. Spreads from 0 pips are allowed, with leverage of 1:500. And the commission fee is $3.5 per lot.
- cTrader accounts are for both investors and speculators with minimum deposits of $200. Maximum leverage is 1:500 and applicable commission is $3/$100k.
>>>See more: Instruct with an ICMarkets open account swiftly
How is ICMarkets Margin calculated?
To calculate the margin, you simply multiply an order’s value by the corresponding margin rate. You can easily calculate the exact margin amount with the following formula: Margin Level = (Equity / Used Margin) x 100%.
For example, when you trade with an initial capital of 1,000 USD and leverage of 1:500, you are applying a margin of 0.2%. This means that ICMarkets will base a percentage of the money in your account on margin. In the above case, it is necessary to pay 0.2% of $1000 which is $10 to use 1:500 leverage.
In the case of a currency pair with USD as the quote currency (or USD second). We just need to convert the transaction value of the order to USD. Then, based on the leverage ratio multiplied by the transaction value, the ICMarkets Minimum Margin of this transaction will be obtained.
In the case of currency pairs with USD as the base currency. The value of a trading order will be calculated on 1 lot = 100,000 USD. In the case of 3 currency pairs that do not contain USD. You must use USD to buy the currency pair. Then calculate the minimum deposit for this transaction.
What does ICMarkets margin include?
Some concepts that investors on ICMarkets need to pay attention to are Margin Stop Out, Margin Call, and Margin Level market leverage. All of these concepts are extremely important in the Forex investment process on ICMarkets. Join us to learn those important concepts.
ICMarkets Stop Out
This is the margin stop level according to ICMarkets regulations. On all trading platforms, ICMarkets Stop Out has a level of 50%. This means that when the ICMarkets Account margin level drops to equal or below 50% of the required margin level. Then the exchange’s system will start automatically closing your open trading orders.
ICMarkets Margin Call
The margin exchange warning indicates that your account is approaching its liquidity limit. When you have a loss, your capital will be reduced, leading to a decrease in the margin percentage. When your account drops to the Margin Call level, your trading order may be closed by ICMarkets. At this point, you will have to deposit more money to continue trading.
Margin Level
The Margin Level is the deposit level, an extremely important concept to know when trading. The margin level allows you to know how much reserve capital you have left to continue participating in trading. The higher the Margin Level, the more Free Margin you have and you can trade with more volume.
With the lower deposit level, the amount of Free Margin remaining is less, in some cases, the Free Margin will be negative. If the Free Margin level reaches 0 or is negative, you will not be able to continue trading. The worst-case scenario is when the Margin Level drops to 100% or even lower. At this time, your account is at risk of Margin Call or Stop Out depending on the regulations of ICMarkets.
When to use ICMarkets Margin?
Using Margin in trading on ICMarkets brings many benefits to traders. However, if not used properly, this is like a double-edged sword. Brings risks that cause investors’ accounts to decrease quickly. There can even be a situation where your account burns out.
Use margin when trading large sizes
The first benefit of margin trading is that it helps traders trade large volumes with small capital. Especially suitable for experienced investors to easily increase profits. If you choose to invest with large transactions on ICMarkets. Please consider the margin method.
When you want to take advantage of ICMarkets Leverage
Taking advantage of Leverage ICMarkets Leverage can be considered quite an effective investment tool for short-term investors. An example is the form of surfing investment, intraday investment. Short-term transactions carry price fluctuations that are not too large. If you only use a small amount of capital, the profits will not be high.
When investors take advantage of large capital sources and spend small costs, it will help them earn higher profits. For the ICMarkets trading platform, interest rates when using margin are not charged. In many cases, some investors also receive additional interest when the trading pair has a positive rate. Let’s make good use of ICMarkets Leverage.
Who should use ICMarkets Margin?
ICMarkets Margin can be used by everyone. However, newbies who do not have much experience predicting trends and finding points to enter orders, should not choose too high a leverage level. Long-time experienced investors and Forex experts – are the most suitable people to use margin.
It should be noted that before placing an order, traders need to spend time researching market trends. Research using a combination of fundamental analysis tools and technical analysis. Judge the trends so that you can apply the appropriate Margin level to bring maximum profit.
Analyze the advantages and disadvantages of ICMarkets Margin
ICMarkets’ margin leverage has many advantages, but some disadvantages still exist. Thanks to that, you can take advantage of the advantages to develop. At the same time, limit disadvantages to achieve the best trading efficiency. The following are the advantages and disadvantages for investors to note when trading margin on ICMarkets.
Advantage
ICMarkets allows players to use small amounts of capital and still be able to trade. Moreover, it also can bring huge profits in a short time. At this exchange, leverage can be up to 1:1000, a diverse leverage level for traders.
Cost of using Margin in ICMarkets Markets. The overnight swap fee is quite low. If there is any cost, investors only pay when the order is held overnight and the amount payable is also very low. Furthermore, there are a certain number of products in each Buy and Sell order. Traders can also receive swaps without having to pay the broker.
Defect
The biggest disadvantage of margin leverage on ICMarkets is risk. It is a natural thing in investing that big profits always come with high risks. When using large-margin leverage to optimize profits. Then you need to consider accepting risks, even burning your account.
Epilogue
Above is basic information about ICMarkets Margin. Hope this article has helped you understand more about this leverage. From there, you can make choices that suit your level of capital and skills. Always have an effective capital management plan, and follow investment strategy and discipline to achieve the most optimal results. And try to update the latest information about ICMarkets at ICMarkets News
>>>See more: What is ICMarkets? Is it a leading forex platform?
Frequently asked questions?
What is the maximum leverage level to trade on ICMarkets?
ICMarkets has a maximum leverage of 1:1000.
How much is ICMarkets Stop Out?
When the margin account is reduced to the same level or 50% less than the original amount.
What is ICMarkets Margin for transactions?
Short-term trading, scalping trading, intraday trading, and small capital capacity.
