Many
of the stories expressed by our brother, the loss of funding due to run out to
play forex. Capital is predicted able to change the fate they often end up
exhausted nothing left, crushed the hopes that had been coveted. The reason is
only one: margin call. What is the margin call? And how the margin call can
change the fortune be disastrous for an account? This article will discuss it.
Margin
call (MC) is a condition in which the open position is not allowed to be passed
again as cash equity has thinned, so that it can result in a total loss and
should be done to inject (plus capital) before exposure margin call.
If
the money in your account falls below the required margin (usable margin), the
broker will close some or all positions. This prevents the account became
negative. Therefore, traders will be desperately trying to avoid a margin call,
do not let your trading be done every day and every minute discharged without
the rest because of this.
Margin
Call can be seen easily through Margin Level. When the margin level has fallen
close to 100%, the open position can be closed automatically by the system
broker. Margin call can mean the liquidation of "forced" by the
broker because the account does not have sufficient funds to cover or closing
losing positions.
Additionally,
you can no longer order if the Free Margin is insufficient for the quantity you
want to order a lot. Therefore adjust the use of lot with the power of capital
and margin so as to take into account aspects of Margin Call. Ideally, get
trading with a maximum 20% cash equity, unless your technique allows for orders
in excess of 20% of safely.
You
should also know that most brokers require a higher margin during the weekends.
For example, on weekdays only requires 1% margin, but to hold the position over
the weekend the necessary margin can be increased up to 2% or higher.
Margin
is a sensitive subject and some people argue that too much margin is dangerous.
It all depends on risk considerations alone, would you rather jump over bridges
or passing through the side of the road.
The
important thing to remember is that, you should read the policies with respect
to margin broker thoroughly to understand and comfortable with the risks that
will be used.
Let's
say you open a regular Forex account with $ 2,000 (not a smart idea). You open
1 lot of EUR / USD, with a margin of $ 1,000 request. Usable Margin is the
money available to open new positions. Since you started with $ 2,000 and $
2,000 worth of usable margin, then when opened 1 lot, which requires a $ 1,000
request margin, usable margin usable margin you will turn into $ 1,000. If your
losses exceed the usable margin totaling $ 1,000, you will get a margin call.
Source:
http://forex4pemula.blogspot.com
http://www.gainscope.com
http://blogkangredi.blogspot.com