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Margin Call ( How to avoid it )

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Posts: 232 since Sep 2010

Margin Call ( How to avoid it )

I have been trading Forex pairs here recently ( small amount of $ , still getting my feet wet )

My question comes down to Margin / Margin Calls , and how to avoid getting " Called Out " and having your position(s) automatically closed

For Example..... Say I have $200 in my account to trade with
I only want to risk $100 on the trade, and my Stop is 100 pips from my Entry
So, I buy ( trade ) 10 micro Lots of the EUR/USD , this having a $100 of my $200 account at risk

I'm using FXCM to trade Forex, and the Margin required per 1 Lot to trade the EUR/USD is $20
So to place this trade, I would have all of the money in my account tied up in the Required Margin
If I lose on the trade, and get stopped out at the Full $100 I had at risk, would I get a Margin Call or would I still have $100 left in my account to trade with, and could then, Buy 5 micro Lots on the EUR/USD ?

I'm just a bit confused as to how Margin / Margin Calls work on the Forex markets and want to make sure that if I open an account with $4000 , and have 5 different trades going on at the same time, while risking a max of $100 per trade, that if worst case scenario, I get fully stopped out on each of the 3 of the 5 trades trades, while I'm profitable on the other 2 trades, that I won't get a Margin call and have my 2 trades I'm profitable on, get closed out .

Thanks for the help everyone, Very much appreciate it

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