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Margin Call??

Discussion in 'Beginners Bootcamp' started by ronan chai, Jun 24, 2011.

  1. ronan chai

    ronan chai Private

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    Can anyone please tell me how does margin call really look like?? I've been trading in micro account real live account...and i don't seem to get any margin call even when my account reaches like 11cent....
    Do i really get a call...as in handphone call from the broker???
     
  2. Andrey best

    Andrey best Recruit

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    I have never had a micro account. But it all depends on your leverage. Margin call is when the trade or trades that went bad are closed out by the broker and you have almost no money left in your account to open any other positions. again all depends on leverage.
     
  3. ronan chai

    ronan chai Private

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    ok! Thank you!! :)
     
  4. Pharaoh

    Pharaoh Colonel

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    A long time ago, before markets were run by computers, stock and options brokers would try to call traders. Today, that's pretty rare, especially in the forex market. By the time the call got through, price action would likely have either have moved you out of danger or wiped you out.
     
  5. Romeo

    Romeo Sergeant

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    It really depends of the size of the account.
    If you have an account with a few thousand dollars, nobody will bother calling you!
    Correct money management will keep you away from such an incident. If you trade with 2% risk per trade, it will take more than 35 consecutive losses to bring you in such a situation.
    After 15 consecutive losses, you have to really make second thoughts about your trading system!
     
  6. Jorex

    Jorex Recruit

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    Margin Call?

    Usually Brokers call their heavy clients. You probably understand that it is impossible for a firm to call thousands of clients when they reach the margin-call level. If a client makes large deposits, he will receive the VIP service you are talking about, but don't expect it for a micro or small account.
     
  7. Pharaoh

    Pharaoh Colonel

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    Someday I'll have enough money to get a real phone call from Mr. Margin. :D
     
  8. RahmanSL

    RahmanSL Major

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    What does a margin call looks like??

    ...hehehe...seems like Jorex, Audrey, Romeo, and...of course...Pharaoh have never ever got a margin call or getting an account wipe-out.

    Ok ronan, I had have quite a number accounts wipe-out (7-8) and numerous margin calls (over 20) and so knows exactly what a "margin call" looks like.

    If you using MT4 platform (and with 1:500 leverage), the bottom column (with all the Balance, Equity, Margin, Free Margin, & Margin Level) will first turn a pinkish color warning of a possible margin call. If the account balance gets progressively worse, with minus Free Margin and (depending on your Broker margin requirement) less than 50% Margin Level.
    Once Margin level is below 50%, the column will turn red and if the account balance worsen, then all of a sudden, and with a flash, the account balance will become zero or left with a few tiny bitty cents.

    As for your 11 cents balance in micro account, if you multiply that with 500 (1:500 leverage) you get 55 points (which is 11% of usd5 micro account). Depending on your leverage and brokers margin requirement, you are still safe...at least for just a little while longer, but hanging just by the skin of your teeth!

    Oh yah, I never ever got any telephone call or e-mail warning from any of my brokers of an impending margin call! Guess my account (just over usd10k) is not big enough to qualify for such service.
     
  9. Pharaoh

    Pharaoh Colonel

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    True confessions time.

    I have seen what a margin call looks like. I was running a small live account with an experimental EA trading a CHF pair when the SNB did an intervention.

    Before I could shut it down, it margin called - twice. :hissyfit:

    What I was lamenting was that I don't have enough money to hear what a real phone call from Mr. Margin sounds like. You have to have a pretty big account before anyone at your forex broker would bother to make a phone call when things are going wrong.
     
  10. RahmanSL

    RahmanSL Major

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    Whaaaat??? You, the great son of Ra'a, got margin call..and twice???...
    Whooooh, now that makes me, a mere mortal, feels very much better! : )

    Ok, if I do get to trade >usd500k account sometime in the future, I do hope I will never ever have to receive a tel call from Mr. Margin Call.

    I can imagine how that Lesson guy must be feeling as he watch the account with all the money, entrusted to him from one of the oldest British bank, getting smaller and going into margin call. His broker must be busy like hell calling and warning him of the impending margin call....and then, phooof and with a bright violet light, the multi-million account balance is reduced to pennies.

    Now, that would indeed be a sick and horrible feeling!
     

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