Every Forex broker that has leverage/margin trading sets a margin call level. The margin call level is displayed as a percentage. At Headway the margin call level is 30%.
A margin call level is basically a level that indicates how much money you have available to open an order or to keep your current positions open. When a trader's margin drops to and below 30% a margin call is triggered. A margin call is when the broker contacts the trader to let them know that they need to make a deposit or close some positions to increase the margin level.
When the margin level is below 30% it is possible but not obligatory that some or all of your open positions will be closed starting with the most unprofitable until the required margin level is reached. This is called a “Stop Out”.
When the margin level reaches 0% all open positions will be closed with a stop out order to prevent further losses.
The stop out level for Ghana, Tanzania, Nigeria, Kenya, South Africa, Egypt, Lebanon, Zimbabwe, Singapore, Poland, Turkey, China, Algeria, Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Chad, Congo, Congo, D.R., Cote d'Ivoire, Egypt, Ethiopia, Gabon, Gambia, Guinea, Lesotho, Libyan Arab Jamahiriya, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Namibia, Niger, Rwanda, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Swaziland, Togo, Tunisia, Uganda and Zambia is 20%.
Understanding how trading with leverage and margin works is an important part for every trader and investors risk management strategy.
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