Topics How not to be marginalized in Forex Call?
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- What exactly is Cal Margin?
- What are the needs of the margin?
- Margin Call Prevention Methods
- Principles of Adjusting Trading Volume to Avoid Call Margin
- Tasks of a trader
- Conclusion
What exactly is Cal Margin?
Understanding what a margin call is and how it works is the first step in knowing how to prevent it. Most new traders want to focus on other trading topics such as technical indicators or chart patterns, with few traders considering other important components such as margin requirements, account balance, margin used, free margin and margin level.
If you suddenly encounter a call margin, it usually means that you have no idea what the call margin is and you open your trades regardless of the margin needs. If so, you are doomed to failure as a trader. Guarantee.
When your account margin level falls below the minimum required margin level, margin call occurs. At this point, the broker will notify you and request that you deposit more money into your account to meet the minimum margin requirement. Today, this process is automated, so your broker will probably notify you via email or alert on the trading platform instead of a real phone call.
What are the needs of the margin?
Before placing any order, know the needs of the margin. It is important to know the needs of the margins before trading. Most traders do not pay attention to the concept of margin call, especially when sending pending orders to their broker. Normally, traders register a custom through their broker, and the order stays open until the price reaches the desired level or until the order expires.
When you place a pending order, it does not affect your trading account because the margin does not apply to pending orders. However, it automatically exposes you to the risk of a pending order. If you do not monitor your margin level properly, the execution of this order may lead to a margin call.
To avoid such a situation, you should consider the need for marijuana before placing an order. You must calculate the amount of margin that will be deducted from your free margin. Also have some extra margins to keep your trade breathing.
Opening multiple pending orders can be quite confusing, and if you are not careful, these orders can lead to margin calls. To avoid such a catastrophe, it is essential to know exactly how much margin you need for each trade.
Margin Call Prevention Methods
Use stop loss or trailing stop orders to avoid margin margin . If you do not know what a loss order is, you are on a downhill road called losing a lot of money. In the course of different types of orders in Forex, we explained the loss limit and trailing stop. As a reminder, the loss limit order is essentially a stop order that is sent to the broker as a pending order. This order is activated when the price moves in the opposite direction of your trade.
For example, if you had a 1 / USD USD / JPY buyout at 110.50 and you set your loss limit at 109.50. This means that when USD / JPY drops to 109.50, your stop order will be activated and your buy position will be closed due to a loss of 100 pips or $ 100.
If you traded without a loss order and the USDJPY continued to fall, your call margin would be activated at a price point, depending on the amount of money in your account. A loss limit or trailing stop order will prevent you from losing more, which will prevent you from becoming marginal.
Principles of Adjusting Trading Volume to Avoid Call Margin
Divide your trading volume and do not enter at once. Another reason some traders end up being marginalized is the misjudgment of price movements. For example, you think GBP / USD has gone too high and too fast and you believe it can not go up at all, so you are opening a big sell position.
This kind of deal is a kind of false confidence! Increases the likelihood of creating a margin margin. To prevent this, there is a method of dividing the volume of transactions, which is also called “scaling”. Instead of trading 4 mins immediately, start with 1 min. Then when the price moves in your favor, add the deal or increase its weight.
As you continue to add new trades, you can start shifting the loss limit on previous trades to reduce potential losses or even lock in profits. Matching trades can help you maximize your profit with zero risk when you combine all trades.
Although this usually means that you need to invest more capital to meet the need for more margins, adjusting trades at different price levels and using different levels of the loss limit means that your risk of loss in this trade is spread. It has been found to reduce the likelihood of a margin margin (compared to when we open a big deal at once).
Tasks of a trader
Know what you do as a trader. It has happened many times that novice traders are faced with margin call and do not know what happened to them! These traders are traders who have put all their thoughts and mentions only on making money. They do not know what they are doing and they do not fully understand the dangers of Forex trading.
Do not be one of these traders. Your top priority should be risk management, not profit . Risk management is an important issue and that is why we will address it in detail later.
Conclusion
There are five ways to help prevent margin call:
Pay attention to the currency pairs you trade and their margin needs. Know when to stop your losses so that you can stay in the market.
Understand the fluctuations. Be aware of news and events that can cause prices to fluctuate and destabilize your account. Remember, as a trader, you should always prioritize risk management over profit.
Labels: Order to build a Forex robot , Build a stock trading robot , Build a trading robot , Trader robot design , Free Forex Robot , Forex robot programming , Forex Expert Making Tutorial , Build a trading robot with Python , Download Forex Trading Robot , Buy Forex Trader Robot , Automated Forex Robot , Free stock trading robot , Learn how to build a Forex trading robot , Alpari trading robot , Forex robot for Android , MetaTrader robot design , MetaTrader robot programming , Forex robot design , Forex robot programming , Automated trading
