Margin Call ( How to avoid it ) | Currency Futures


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Margin Call ( How to avoid it )

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Market Wizard
Boca Raton
 
Trading Experience: Advanced
Platform: Variety
Broker/Data: Optimus Futures, LLC
Favorite Futures: Futures
 
mattz's Avatar
 
Posts: 2,410 since Sep 2010
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mdsvtr View Post
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

Margin Deficit or Margin Excess consists of initial margin on each lot you trade + Gains - Losses (in case you trade a number of pairs) + Cash

You first have to find out what is the Initial Margin on each lot you trade, than use the formula above

Matt

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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