What is a margin call in forex?

[PIPruit]

What is a margin call, how do you avoid it, and what is going to happen when you get one, please?

 

[Fruby]

Well explained

 

[ele020]

Well explained

Thank you

 

[Eryk Martin]

What is a margin call, how do you avoid it, and what is going to happen when you get one, please?

Suppose you have an open position, and the market is going against you i.e. you are losing. Now your margin is falling, so the broker has set a predefined limit at which you will receive a notification within your trading platform.
Below the margin call level, there is another level which is stop out, if stop out level is reached then the broker will close your position.
To avoid margin calls or stop out, it is recommended to use a stop loss while placing the order.

 

[richardmarcus1509]

What is a margin call, how do you avoid it, and what is going to happen when you get one, please?

it is call given by the broker when the funds reach a particular threshold in order that the client does not incur more losses it is the used margin alert notification at 30% when I loose. If my equity falls below 50% the broker will start selling my open positions in order that I don’t incur more losses. When your used margin reaches 70% it is generally given to the client in order to minimise the losses to the client to protect his margins and stops the client position to go into negative

after margin call is given stop out occurs which automatically closes the position if stop out occurs by the broker. These are useful to minimise clients losses and protect his margins

 

[perryjohn765]

margin call is a notification when you are losing and the equity drops. The call margin call level can be different for different brokers and after the margin call there is stop out which closes your position automatically.

 

[ele020]

These calls are demands for additional money to bring a margin account up to the minimum margin. It occurs when a margin account runs low on funds, usually because of a losing trade.

 

[JimmyRozza]

I had a few of these in the early days! A few blow accounts too!
If you learn about risk management and the capital preservation, it can be easily avoided. It's usually cause by greed and over leveraging.

 

[richardmarcus1509]

I had a few of these in the early days! A few blow accounts too!
If you learn about risk management and the capital preservation, it can be easily avoided. It's usually cause by greed and over leveraging.

it is call given by the broker when the funds reach a particular threshold in order that the client does not incur more losses it is the used margin alert notification at 30% when I loose. If my equity falls below 50% the broker will start selling my open positions in order that I don’t incur more losses. When your used margin reaches 70% it is generally given to the client in order to minimise the losses to the client to protect his margins and stops the client position to go into negative

after margin call is given stop out occurs which automatically closes the position if stop out occurs by the broker. These are useful to minimise clients losses and protect his margins

 

[ele020]

I had a few of these in the early days! A few blow accounts too!
If you learn about risk management and the capital preservation, it can be easily avoided. It's usually cause by greed and over leveraging.

Yes, overleveraging is the main cause of margin calls.. In my early days I was so tempted with brokers offering 100X plus leverage and ended up loosing my capital. Gladly, things are better now.

 

[JimmyRozza]

Yes, overleveraging is the main cause of margin calls.. In my early days I was so tempted with brokers offering 100X plus leverage and ended up loosing my capital. Gladly, things are better now.

I still use a good amount of leverage, but smaller lot sizes and a tight risk management strategy