I know that stops are not guaranteed. If the market makes a major move against you and the stop cannot be honored, you can loose your account. But, how often is a true margin call? Meaning, the broker has liquidated your account and still wants more money from you to cover the move against you. Ever happen? Rare? All the time?

If it does happen, what means do they use to enforce it? If you say too bad, you ain't paying, what do they do?

When your open trades are making losses to the point that it is wiping half of your account, the broker has the right to close all trades, and they usually do.

This way, they will not find themselves in the position to ask money from you if your account becomes negative because they will stop all trades before that happen.

Ah, okay, so that effectively eliminates the risk of a margin call.

That is a margin call. It mitigates the risk of owing more than you have in the account.

That might be what is called a "margin call" in forex, but its not what I'd call a margin call. A margin call to my understanding is when your broker calls you up and asks for more money as you've lost more than the money in your account. This happens in commodities.

what you're referring to is 'overloss' - not with retail online fx trading
ecns' ?

check with individual broker what % of account margin
they use when initiating 'close trades'

I thought I saw an excellent margin explanation somewhere on this forum.

A friend of mine has asked me to explain it to him.

With numbers like "margin 4000%" it can get a little confusing to newbies.

Although I think I know it .. do you think words would come out of my mouth ?

My understanding is that if you have an account of $10000 at 100:1 Leverage and position is $1000 then if you put one trade on your available margin is $9000 or 900%.

If you to below an arbitrary amount set by your broker ( 50% in the case of IFBX) then your position is closed out.

Would love to find that thread .. it explained it properly !

Hi Traders

Hope you're fine and ready for new trading week...
I just to tell and hear from you a few words about Marginal Trading...
Marginal trading is both what makes trading on the foreign exchange market so possibly profitable – and its biggest risk. In a nutshell, trading on the margin is simply trading with borrowed capital. Depending on your dealer, you can purchase $100,000 worth of currency for as little as $500. If your trades are on target, you make a profit on the entire $100,000 lot – minus dealer commission, of course. If, on the other hand, your trade ends up losing you money, you could end up being liable for far more than the $500 you originally invested.

That’s why one of the strongest bits of advice you’ll hear from most experienced forex traders is ‘Keep your eye on the margin’ – or even more strongly, ‘Don’t ever trade on the margin’...

Regards
delca

__________________
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Does anyone know how hedge position margin is calculated with your broker? (assume it's a non-NFA broker which support hedging)

I have a live account at ActivTrades which requires zero margin for hedge position, but this rule is going to change by Aug 23 due to new requirements of their liquidity provider.

It means currently 1 long + 1 short hedge position requires zero margin, after Aug 23, it requires $1000 margin (2 lot requires 2x$500 assume 200:1 leverage)

It seems every broker has different margin rules on hedge position, can anybody share his experience please?

Thanks!