About FX trading

Trading in the FX market: It involves the buying of one currency against the sale of another. Currencies are quoted in pairs for example Sterling/Dollar with the movement in price occurring when one currency strengthens against the other.
What is margin trading?: FX is traded on margin, or in other words it's a leveraged product. This means that you only have to pay a small proportion of the total value of your position as an initial deposit to open the position. This allows you to open relatively large positions, but with a much smaller initial outlay whilst giving you the opportunity to sustain profits and losses as if you had invested the whole amount. FX is usually traded with a high degree of leverage, typically 1% or 100:1 leverage. This means that you only have to deposit 1% of the total value of your position so if the total value of your position was worth $100,000, your initial deposit would only be $1,000.
The Risks of Trading FX: Although this form of margined/leveraged trading has its advantages as you are able to magnify the returns on your investment if the market moves in your favour, it also carries a high level of risk to your capital as your losses will also be magnified if the market moves against you. You could lose more than your initial investment and you may be required to make further payments if you wish to maintain your position.