What is Margin Call?

[Daniel.Leo]

What is Margin Call? The Secret to Avoid Forex Margin Call!
Hope this video will be helpful to you

 

[Nathanfc]

What is Margin Call? The Secret to Avoid Forex Margin Call!
Hope this video will be helpful to you

Firstly, in order to understand a forex margin call, it is essential to know about the interrelated concepts of margin and leverage. Margin and leverage are two sides of the same coin. Margin is the minimum amount of money required to place a leveraged trade, while leverage provides traders with greater exposure to markets without having to fund the full amount of the trade.

A margin call is what happens when a trader no longer has any usable/free margin. In other words, the account needs more funding. This tends to happen when trading losses reduce the usable margin below an acceptable level determined by the broker.
A margin call is more likely to occur when traders commit a large portion of equity to used margin, leaving very little room to absorb losses. From the broker’s point of view this is a necessary mechanism to manage and reduce their risk effectively.
Below are the top causes for margin calls, presented in no specific order:
Over-leveraging your account, An underfunded account which will force you to over trade with too little usable margin, Trading without stops when price moves aggressively in the opposite direction. You can avoid your margin call by using Low leverage for your trades,
Exercise prudent risk management by limiting your losses with the use of stops.
Keep a healthy amount of free margin on the account in order to stay in trades and Trading smaller-sized trades.

 

[Real_Freedom]

What is Margin Call? The Secret to Avoid Forex Margin Call!
Hope this video will be helpful to you

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