Margin Call Explained How to Protect Your Forex's Account from Forced Liquidation
A margin call is one of the most essential concepts that every forex trader needs to learn about, although it is not uncommon among beginners for a handful to have misconceptions about it. In other words, you get a margin call when your trading account’s balance no longer meets the broker’s margin requirements, which can then block your account from further trading until you either deposit the funds needed or close enough positions to free up the required collateral to continue. Before you can understand what a margin call is, you have to know the "basics" of margin trading. When you trade forex, you don’t pay the full value of your position upfront. You’re not paying the full price for a piece of cake; instead, you’re putting down a “margin,” a fraction of the full cost. You can control a big trading position with a smaller account balance - that’s known as leverage. Understanding Margin and Margin Level To be able to manage margin calls, you should have a thorough un...