XM is one of the top forex brokers in the globe. It was founded in 2009 and up to present XM has over one and a half million clients from more than 190 countries. The leaders have held hundreds of seminars and visited over 120 countries to meet with their clients and partners to share valuable experiences for traders. XM’s become so big and since forex is pretty complicated, XM launched the XM calculator tool to help traders calculate their order parameters easier such as: margin, leverage, swap, or spread…
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What is XM calculator?
XM calculator is a tool that allows its traders to make accurate calculations at a certain point to make their trades the most profitable. This is an all-in-one calculator. It consists of a currency converter, a margin calculator, a swap calculator… The main purpose of it is to help you calculate your profit rate and risk score so that you can make the most out of your trades.
Just like its name, this converter lets you convert the value of a currency to another by using live currency rates 24/7.
The mechanism is very simple. First, you put in the currency you want to change from and then the currency you are converting to. After that, you enter how much money you wish to convert, and hit Enter. And it’s done.
Using margin in forex trading is a new concept for many traders, and one that is often misunderstood. Margin is a good faith deposit that a trader puts up for collateral to hold open a position. More often than not margin gets confused as a fee to a trader. It is actually not a transaction cost, but a portion of your account equity set aside and allocated as a margin deposit.
The margin calculator is a feature of XM calculator. It allows traders to calculate the margin they need to open and hold a position. You just need to enter the base currency of your account, then select which currency pair you want to trade (to calculate the spread of that pair) and the leverage you want. Then, put in the size of your position. The unit is lot. Hit Enter and you have the margin.
Here is the formula used to calculate margin:
Margin = (Trade size / Leverage) x Currency pair spread
Swap is determined based on the interest rates of the countries involved in each currency pair and whether the position is short or long. In any one currency pair, the interest is paid on the currency sold and received on the currency bought.
Swap charges are released weekly by the financial institutions we work with and are calculated based on risk-management analysis and market conditions. Each currency pair has its own swap charge and is measured on a standard size of 1.0 lot (100,000 base units).
Swap calculator helps you calculate the difference in interest rate between two currencies you chose. To use it, first, enter the base currency of your account, then select which currency pair you want to trade (hence the spread). Finally choose your account type, the size of the trade in lots and the leverage rate that you want.
Here is the formula used to calculate swap:
Swap = (1 Point / Spread) x Trade size x Short swap value
There is more to the XM calculator. To know more, click here.