Many who want to indulge in trading, but are gripped with uncertainty which keeps them away. Buying and selling stocks, cryptocurrencies, forex, etc., is very exciting, with huge gains to be made. Usually, to win in these markets, you need information and luck. You cannot do much about luck, but you can certainly be informed about the market.

There are a few key terms that you must know about before you start investing. This will help you to understand the markets better and help you make better decisions. You may often come across two terms: Margin and Leverage (1). Many times, these two terms are used to mean the same thing. Do they both mean the same? They both are used to indicate a specific way of opening a trade position with a broker, with a small amount of capital but taking a much larger position. Above, we said “leverage” and “margin” are two terms that are often used interchangeably. This is true, but we should explain that the two have slightly different meanings.

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