Margin in forex trading is the amount of money required in your account to open and maintain a leveraged position. It is not a fee or cost; rather, it is a portion of your account equity that is set aside as collateral for the trade. The required margin depends on the position size, the currency pair, and the leverage provided by your broker.

The formula is: Required Margin = (Position Size in Units x Current Price) / Leverage. For example, trading 1 standard lot (100,000 units) of EUR/USD at 1.0850 with 1:100 leverage requires a margin of (100,000 x 1.0850) / 100 = $1,085. Without leverage, you would need the full $108,500 to control the same position.

While leverage amplifies both profits and losses, understanding margin requirements helps you manage your account properly. If your account equity falls below the maintenance margin level, your broker may issue a margin call, requiring you to deposit additional funds or close positions. Always ensure you have sufficient free margin to withstand normal market fluctuations.