Working Capital Investopedia: A Guide to Understanding and Investing

Working capital is an important concept in forex trading. It refers to the amount of money a trader has available to open positions, manage risk, and pay for costs associated with the trading activity. Working capital is the difference between the total assets and the total liabilities of a trader. It is important to have enough working capital when trading forex, as it allows a trader to cover the cost of any losses incurred in the course of making a positive return. Having a healthy balance of working capital can also help to protect traders from emotional mistakes that can frequently lead to large financial losses.