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Forex Education Forex Glossary
by ForexNewsNow Team on August 11, 2010

Forex key concepts: What are forex funds?

NEW YORK (Forex News Now) – Forex funds are the money that FX use in their accounts to engage in currency trading.

There are essentially two types of forex funds: Real forex funds, which are those used in live trading accounts; and virtual forex funds, which are those used in demo trading accounts.

Forex funds are generally measured in terms of “lots.” These are the standard unit size of a transaction; typically, one standard lot is equal to 100,000 units of the base currency.

If the forex funds are in a mini account, then a lot comprises 10,000 units. If the forex funds are in a micro account, a lot comprises 1,000 units.

Margins are another factor of key relevance to forex funds. These are the deposits of forex funds required to open or maintain a position. A margin can be either “free” or “used”. Used margin is that amount of forex funds that is being used to maintain an open position, whereas free margin is the amount of forex funds available to open new positions.

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