Margin Call

"If your capital is 1000, your company and the results currently 999 losses. If the left there the possibility of losing your business until 10. the question is who will bear the loss of 0 if your company is allowed to continue, but only 1,000 of your capital? he answered NO ready to bear the losses. by therefore, your business must be forcibly closed so that the loss of just you to your capital is 1.000 "

" forex broker will be closed strength transactions you do if losses almost the same for your funds to the broker does not cover the loss of your transaction. that's called Margin Call "

Margin Call

margin call means the liquidation of "forced" by the broker because your account has no funds enough to cover / hedge your position is lost

basis for determining the margin call there usually 2, namely :.

I. Level margin

The margin level of the system used on the MetaTrader platform.

For example, the broker determines the Margin Call occurs if the margin level of 5%, when Equity = 5% x "margin used ", a margin call will occur. . While one of the open positions will be closed automatically until sufficient margin trader to cover losses

formula for calculating the margin level is:

Margin Level = Equity / used margin

= Equity Balance runs over / under profit and loss.

to the MetaTrader platform, a trader does not need to calculate the margin level manually, because when a position is open, the margin level will appear on the "Trade" tab in units in percent (%). All we need to do is to maintain the margin level no minimum margin broker. (For example, 5%)

II. The initial capital - Margin - Loss = 0
There are also brokers that specify a margin call when the initial capital - Profit - Loss = 0. This means that there will be a call margin if the free margin, you really - really exhausted.

for example: you deposit a $ 500 capital. If you open a negotiating position GBP / USD for 1 lot (100,000) with a leverage of 1: 500 requires a margin of $ 0. Then the capital held temporarily as collateral (margin) to open 1 lot GBP / USD is $ 0

So the rest of the margin you are to stop the loss are: $ 500 - $ 0 300 = $

If the market direction contrary to your prediction, and floating loss (loss) you reach $ 300, then there is no margin / money to keep the losses, so that a position will be automatically closed by the broker. Then, a margin of $ 0 dilock temporarily as collateral for open first position of GBP / USD, going back to your account after your position on closing. So your margin remaining $ 0 only.

By knowing the margin call is my hope that before making a transaction you have calculated how much will be handled and how losses can bear, in order not occur appeal margin.

The teaching materials are still forex Forex Analysis

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