The market values/prices used to compute the equity or margin requirement in an Interactive account may differ from the price disseminated by exchanges or other market data sources, and may represent Interactive's valuation of the product. Among other things, Interactive may calculate its own index values, Exchange Traded Fund values or derivatives values, and Interactive may value securities or futures or other investment products based on bid price, offer price, last sale price, midpoint or using some other method. Interactive may use a valuation methodology that is more conservative than the marketplace as a whole.

For securities, the definition of margin includes three important concepts: the Margin Loan, the Margin Deposit and the Margin Requirement. The Margin Loan is the amount of money that an investor borrows from his broker to buy securities. The Margin Deposit is the amount of equity contributed by the investor toward the purchase of securities in a margin account. The Margin Requirement is the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value. The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation:
There is one unpleasant fact for you to take into consideration about the margin call Forex. You might not even receive the margin call before your positions are liquidated. If the money in your account falls under the margin requirements, your broker will close some or all positions, as we have specified earlier in this article. This can actually help prevent your account from falling into a negative balance.
So, for an investor who wants to trade $100,000, a 1% margin would mean that $1,000 needs to be deposited into the account. The remaining 99% is provided by the broker. No interest is paid directly on this borrowed amount, but if the investor does not close their position before the delivery date, it will have to be rolled over. In that case, interest may be charged depending on the investor's position (long or short) and the short-term interest rates of the underlying currencies.
Once an investor has started buying a stock on margin, the NYSE and FINRA require that a minimum amount of equity be maintained in the investor's margin account. These rules require investors to have at least 25% of the total market value of the securities they own in their margin account. This is called the maintenance margin. For market participants identified as pattern day traders, the maintenance margin requirement is a minimum of $25,000 (or 25% of the total market value of the securities, whichever is higher).
Risk Management - Many "research" backtests completely ignore risk management. Unfortunately this is generally necessary for brevity in describing the rules of a strategy. In reality we -must- use a risk overlay when trading, otherwise it is extremely likely that we will suffer a substantial loss at some stage. This is not to say that risk management can prevent this entirely, but it certainly makes it less likely!

To date, we've been experimenting with the OANDA Rest API in order to see how it compared to the API provided by Interactive Brokers. We've also seen how to add in a basic portfolio replication element as the first step towards a proper event-driven backtesting system. I've also had some helpful comments on both previous articles (#1 and #2), which suggests that many of you are keen on changing and extending the code yourselves.


We use real-time margining to allow you to see your trading risk at any moment of the day. Our real-time margin system applies margin requirements throughout the day to new trades and trades already on the books and enforces initial margin requirements at the end of the day, with real-time liquidation of positions instead of delayed margin calls. This system allows us to maintain our low commissions because we do not have to spread the cost of credit losses to customers in the form of higher costs.

Brokers use margin levels in an attempt to detect whether FX traders can take any new positions or not. Different brokers have varying limits for the margin level, but most will set this limit at 100%. This limit is called a margin call level. Technically, a 100% margin call level means that when your account margin level reaches 100%, you can still close your positions, but you cannot take any new positions.


In particular I would like to make the system a lot faster, since it will allow parameter searches to be carried out in a reasonable time. While Python is a great tool, it's one drawback is that it is relatively slow when compared to C/C++. Hence I will be carrying out a lot of profiling to try and improve the execution speed of both the backtest and the performance calculations.
Often, closing one losing position will take the margin level Forex higher than 5%, as it will release the margin of that position, so the total used margin will decrease and consequently the margin level will increase. The system often takes the margin level higher than 5%, by closing the biggest position first. If your other losing positions continue losing and the margin level reaches 5% once more, the system will just close another losing position.

Free Margin – Your free margin represents your total equity minus any margin used for leveraged trades. For example, if your equity is $1,000 and your used margin is $100, your free margin would amount to $900. Following your free margin is extremely important, as it is used to withstand negative price fluctuations from your open trades and to open new leveraged trades. It’s important to understand that your free margin increases with profitable positions, but decreases with your losing positions. Once the free margin drops to zero or below, your broker will activate the so-called margin call and close all your open positions at the current market rate, in order to prevent your equity from falling below the required margin.
Note also that when we begin storing our trades in a relational database (as described above in the roadmap) we will need to make sure we once again use the correct data-type. PostgreSQL and MySQL support a decimal representation. It is vital that we utilise these data-types when we create our database schema, otherwise we will run into rounding errors that are extremely difficult to diagnose!
I post this to let you know, as the title mentions it, that I made a trading diary, with google documents tool. This a generic spreadsheet which allows any trader to manage his trading (his risk, his pnl, his opened position, the orders...) with a trding diary. Every trader,should have one, and I mad mine with google docs. At least you must have an account to acces this spreadsheet.
One of the unique features of TradingDiary Pro which you cannot find in any trading journal software is the options strategy support. TradingDiary Pro is the perfect solution for an options trading journal and tracking your stock and futures options strategies. What is an options strategy? Options strategy is simultaneously buying or selling one or […]
In order to understand Forex trading better, one should know all they can about margins. Forex margin level is another important concept that you need to understand. The Forex margin level is the percentage value based on the amount of accessible usable margin versus used margin. In other words, it is the ratio of equity to margin, and is calculated in the following way:
All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point is the smallest increment of trade. One pip typically equals 1/100 of 1 percent.
Trading on margin refers to trading on money borrowed from your broker in order to substantially increase your market exposure. When opening a margin trade, your broker lends you a certain sum of money depending on the leverage ratio used, and allocates a small portion of your trading account as the collateral, or margin for that trade. The remaining funds in your trading account will act as your free margin, which can be used to withstand negative price fluctuations from your existing leveraged positions, or to open new leveraged trades. The relation between your free margin and other important elements of your trading account, such as your balance and equity, will be explained later. For now, it’s important to understand the meaning of margin in Forex.
As part of the Universal Account service, we are authorized to automatically transfer funds as necessary between your securities account and your futures account in order to satisfy margin requirements in either account. You can configure how you want us to handle the transfer of excess funds between accounts on the Excess Funds Sweep page in Account Management: you can choose to sweep funds to the securities account, to the futures account, or you can choose to not sweep excess funds at all.
For securities, the definition of margin includes three important concepts: the Margin Loan, the Margin Deposit and the Margin Requirement. The Margin Loan is the amount of money that an investor borrows from his broker to buy securities. The Margin Deposit is the amount of equity contributed by the investor toward the purchase of securities in a margin account. The Margin Requirement is the minimum amount that a customer must deposit and it is commonly expressed as a percent of the current market value. The Margin Deposit can be greater than or equal to the Margin Requirement. We can express this as an equation:
How can you avoid this unanticipated surprise? Margin calls can be effectively avoided by carefully monitoring your account balance on a regular basis, and by using stop-loss orders on every position to minimise the risk. Another smart action to consider is to implement risk management within your trading. By managing your the potential risks effectively, you will be more aware of them, and you should also be able to anticipate them and potentially avoid them altogether.

Forex margin is a good faith deposit that a trader puts up as collateral to initiate a trade. Essentially, it is the minimum amount that a trader needs in the trading account to open a new position. This is usually communicated as a percentage of the notional value (trade size) of the forex trade. The difference between the deposit and the full value of the trade is “borrowed” from the broker.

All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point is the smallest increment of trade. One pip typically equals 1/100 of 1 percent.

Note also that when we begin storing our trades in a relational database (as described above in the roadmap) we will need to make sure we once again use the correct data-type. PostgreSQL and MySQL support a decimal representation. It is vital that we utilise these data-types when we create our database schema, otherwise we will run into rounding errors that are extremely difficult to diagnose!
In particular I would like to make the system a lot faster, since it will allow parameter searches to be carried out in a reasonable time. While Python is a great tool, it's one drawback is that it is relatively slow when compared to C/C++. Hence I will be carrying out a lot of profiling to try and improve the execution speed of both the backtest and the performance calculations.
How can you avoid this unanticipated surprise? Margin calls can be effectively avoided by carefully monitoring your account balance on a regular basis, and by using stop-loss orders on every position to minimise the risk. Another smart action to consider is to implement risk management within your trading. By managing your the potential risks effectively, you will be more aware of them, and you should also be able to anticipate them and potentially avoid them altogether.
The market values/prices used to compute the equity or margin requirement in an Interactive account may differ from the price disseminated by exchanges or other market data sources, and may represent Interactive's valuation of the product. Among other things, Interactive may calculate its own index values, Exchange Traded Fund values or derivatives values, and Interactive may value securities or futures or other investment products based on bid price, offer price, last sale price, midpoint or using some other method. Interactive may use a valuation methodology that is more conservative than the marketplace as a whole.
We also apply a concentrated margining requirement to Margin accounts. An account's two largest positions and their underlying derivatives will be re-valued using the worst case scenario within a +/- 30% scanning range. The remaining positions will be re-valued based upon a move of +/-5%. If the concentrated margining requirement exceeds that of the standard rules based margin required, then the newly calculated concentrated margin requirement will be applied to the account.
Margin requirements for futures and futures options are established by each exchange through a calculation algorithm known as SPAN margining. SPAN (Standard Portfolio Analysis of Risk) evaluates overall portfolio risk by calculating the worst possible loss that a portfolio of derivative and physical instruments might reasonably incur over a specified time period (typically one trading day.) This is done by computing the gains and losses that the portfolio would incur under different market conditions. The most important part of the SPAN methodology is the SPAN risk array, a set of numeric values that indicate how a particular contract will gain or lose value under various conditions. Each condition is called a risk scenario. The numeric value for each risk scenario represents the gain or loss that that particular contract will experience for a particular combination of price (or underlying price) change, volatility change, and decrease in time to expiration.
What’s new in version 3.2? New features A vertical view of the instruments panel has been added called Charts view Fancy new splash screen 🙂 Import modules Degiro importer Westpac importer Light Speed importer Interactive Brokers importer update due to cash transaction format change Bug fixes Fixed Gantt chart save issue Fixed layout restore problems […]
The market then wants to trigger one of your pending orders but you may not have enough Forex free margin in your account. That pending order will either not be triggered or will be cancelled automatically. This can cause some traders to think that their broker failed to carry out their orders. Of course in this instance, this just isn't true. It's simply because the trader didn't have enough free margin in their trading account.

Have you always dreamed of financial freedom? Maybe you want to start your own business and need a way to supplement the income it brings in. It doesn’t matter what your goals are – Forex trading may be the solution you have been looking for. This high-reward, high-risk market has plenty of opportunities for the patient, insightful investor. You do not need to spend all day researching and watching the market; currency trading only requires you to dedicate a small portion of each day to it, leaving you with more time to spend following your dreams!
In order to understand Forex trading better, one should know all they can about margins. Forex margin level is another important concept that you need to understand. The Forex margin level is the percentage value based on the amount of accessible usable margin versus used margin. In other words, it is the ratio of equity to margin, and is calculated in the following way:
A Portfolio Margin account can provide lower margin requirements than a Margin account. However, for a portfolio with concentrated risk, the requirements under Portfolio Margin may be greater than those under Margin, as the true economic risk behind the portfolio may not be adequately accounted for under the static Reg T calculations used for Margin accounts. Customers can compare their current Reg T margin requirements for their portfolio with those current projected under Portfolio Margin rules by clicking the Try PM button from the Account Window in Trader Workstation (demo or customer account).
The market then wants to trigger one of your pending orders but you may not have enough Forex free margin in your account. That pending order will either not be triggered or will be cancelled automatically. This can cause some traders to think that their broker failed to carry out their orders. Of course in this instance, this just isn't true. It's simply because the trader didn't have enough free margin in their trading account.
Local Portfolio Handling - In my opinion carrying out a backtest that inflates strategy performance due to unrealistic assumptions is annoying at best and extremely unprofitable at worst! Introducing a local portfolio object that replicates the OANDA calculations means that we can check our internal calculations while carrying out practice trading, which gives us greater confidence when we later use this same portfolio object for backtesting on historical data.
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