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.
Understanding how trading with leverage and margin works is an important part for every trader and investors risk management strategy.
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