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Thread: Margin, margin call and stop out level/ what they mean exactly

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    Margin, margin call and stop out level/ what they mean exactly

    I have notived that a lot of members in the forum are confused with the terms margin call and stop out. Many consider the margin call itself as the blowing of account. Though there is a close relation between these terms they dont mean exactly the same,

    Margin: Trading on margin is a big advantage in Forex trading. This means that to trade $100000 worth of currency you need not invest $100000 in your trading account. We all know that Roboforex offers 1:1000 leverage and so you can just invest $100 to trade $100000 worth of currency. In other words you can say that Roboforex requires its traders to keep a minimum margin of .1% margin to support your trades

    Margin call and stop out: As traders of Roboforex you must be aware that at what stage you will receive a margin call and what level you account will blow. In the pro cent account of Roboforex you have at margin call a 40% and the stop out level is 10%.

    So what does this mean exactly? in simple words if I try to explain, in the course of trading if your equity drops to or below 40% of the minimum margin required to open the trades, you will receive a margin call and when your equity further drops to 10% of the margin required than you experience the stop out which is more commonly known as account blowing. So you can understand that the leverage you chose have a say as to when you will receive the margin call and when your account is stopped out. When you get the margin call you may decide to deposit more funds to avert the stop out level or simply wait for the future to unfold a recovery or a stop out.

    As every trader can understand that both margin calls and stop outs are terrible things during trading and the best safeguard against them is to properly follow a risk and money management system.

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    Quote Originally Posted by Ulthred View Post
    If you face margin calls it will mean that you can't be able to trade anymore because your overall capital have been lost.
    this is reality there are very less chances market will come back, some time it come back also before some years there was 85$ capital and on -80$ loss my order come back into profit, so some time by luck we can gain profit also and can save order from margin call as well,but i recommend to use smaller risk and before margin call think about it otherwise its not easy to handle and keep some backup for this situation to deposit and save self

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    Quote Originally Posted by Ulthred View Post
    If you face margin calls it will mean that you can't be able to trade anymore because your overall capital have been lost. No traders prays for this but what matters in forex is that we must build a profitable trading that will help us to maintain success. If we must succeed trading forex, we must also realize why risk management ought to be followed properly. This risk management will bring about the possible chance for us to manage our investment and see we don't go as far as blowing our capital.
    Your overall capital will be lost if you have entered the stage of stop-out, the margin call is still a situation where your trade is in danger, the forex traders have little hope in that situation. To avoid the margin call and stop-out is not what is so much to achieve, forex traders should only be trading with the correct experience, this will help the trader to trade well. Good plans on the money and risk management is to be observed too.

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    Quote Originally Posted by naeem555 View Post
    this is reality there are very less chances market will come back, some time it come back also before some years there was 85$ capital and on -80$ loss my order come back into profit, so some time by luck we can gain profit also and can save order from margin call as well,but i recommend to use smaller risk and before margin call think about it otherwise its not easy to handle and keep some backup for this situation to deposit and save self
    We don't have to depend on such, I don's assume when I am trading in the market. I simply make good analysis and follow the market the way I know best. Because the forex trading market has to be done with the best of strategy. We don't have to trade with the use of the expectation, good risk management can save us from expecting the market will return to the initial point when it will not.

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    Quote Originally Posted by ola4real View Post
    Your overall capital will be lost if you have entered the stage of stop-out, the margin call is still a situation where your trade is in danger, the forex traders have little hope in that situation. To avoid the margin call and stop-out is not what is so much to achieve, forex traders should only be trading with the correct experience, this will help the trader to trade well. Good plans on the money and risk management is to be observed too.
    I think I have experienced that a few times and I must say that it was so painful, so now I try to be a good trader in such a way that I don't trade in that aspect of taking huge risks, because trading with huge risks has always been known as being the factor which has made a lot of traders to loss with it. We can't become profitable trader when we don't try as much as we can to take learning from the right approach. Margin call means that we don't make the analysis correctly and then also we don't use good risk management.

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    Quote Originally Posted by Brain View Post
    I think I have experienced that a few times and I must say that it was so painful, so now I try to be a good trader in such a way that I don't trade in that aspect of taking huge risks, because trading with huge risks has always been known as being the factor which has made a lot of traders to loss with it. We can't become profitable trader when we don't try as much as we can to take learning from the right approach. Margin call means that we don't make the analysis correctly and then also we don't use good risk management.
    It
    It is not truly possible that every time in whom forex traders are trading, they will be making success, nothing is ever rosy. Forex field is full of the bad days and the good days, but for the forex traders who knows how to trade well, they will have more good days than the bad days, and that will bring success to that trader. What i see about forex field is the risk involved in it, once we can overcome the risk through good forex system and management, we will trade successfully.

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    Quote Originally Posted by Brain View Post
    I think I have experienced that a few times and I must say that it was so painful, so now I try to be a good trader in such a way that I don't trade in that aspect of taking huge risks, because trading with huge risks has always been known as being the factor which has made a lot of traders to loss with it. We can't become profitable trader when we don't try as much as we can to take learning from the right approach. Margin call means that we don't make the analysis correctly and then also we don't use good risk management.
    Taking high risk in trading will give us a constant result both in high reward and high loss ratio. Consider this many times before we want to trade in high risk because those who failed to accept the terms usually regret it a lot, even quit. Achieving goals in forex market must be done safely, no need to rush and make instant cash everyday.

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    rules made to be followed, not to be broken

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    to be able to find the best points to locate the stop loss and the take profits orders , we have to study well the vbalance ability to accept any of the pips to reverse the market on our traders here the right money mangemenet can play a very good role to help us to find many effective ways for the trading suitable for our balance and the suitable lot size . too .

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    Quote Originally Posted by Abu George View Post
    to be able to find the best points to locate the stop loss and the take profits orders , we have to study well the vbalance ability to accept any of the pips to reverse the market on our traders here the right money mangemenet can play a very good role to help us to find many effective ways for the trading suitable for our balance and the suitable lot size . too .
    There is no doubt, stoploss is important, but the best thing the trader should do is that they need to learn how to take trades by making use of the good strategy and then analysis, then taking only quality trades, that will increase the success rate the trader will ever get. Margin call can be reduce by involving our trades with the quality kind of trading methods.

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    Quote Originally Posted by ola4real View Post
    Your overall capital will be lost if you have entered the stage of stop-out, the margin call is still a situation where your trade is in danger, the forex traders have little hope in that situation. To avoid the margin call and stop-out is not what is so much to achieve, forex traders should only be trading with the correct experience, this will help the trader to trade well. Good plans on the money and risk management is to be observed too.
    Stop-out term in the market means that the account of the traders have been stopped as a result of the lost of the whole money in that trader's account. We can avoid the margin call and the stop-out by trading properly, the traders that trades properly will know how to enter a good trend of the market. The traders will likewise know how to close their trade when they know that they are either satisfied with their profit, or they are no more comfortable with more losing.

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    Quote Originally Posted by Darkhorse View Post
    There is no doubt, stoploss is important, but the best thing the trader should do is that they need to learn how to take trades by making use of the good strategy and then analysis, then taking only quality trades, that will increase the success rate the trader will ever get. Margin call can be reduce by involving our trades with the quality kind of trading methods.
    The forex traders who will do himself the good will have to be trading with the stop loss. Stop loss is what will make forex traders to know how best they can trade with their forex account protected. If forex traders are trading forex field without stop loss and other elements of forex trading who can support the protection of the account of the trader, the trader will have margin call and stop-out regularly.

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