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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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    Registered user cutiekc's Avatar
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    Margin call means that the trader has lost a whole lot of their money. You need to know that margin call is a bad experience, so we ought to at the onset, seek for ways to control it and avoid it, which one of them is that we get to make sure we are using a strategy that we have mastered and also a strategy that is also quite much simple and not so hard to understand.

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    Registered user Toyen's Avatar
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    Quote Originally Posted by ola4real View Post
    Sorry for the loss you get. By now, you would have learned your lesson. I want you to know that there are two most important elements of trading who could cause margin call or stop-out for traders who did not use them well. The elements of trading are strategy of the trader and the management of the account of that trader. If the forex traders is smart, disciplined and careful from now till infinity, but lack good strategy and management in their forex account, their end result will be loss.
    Losing is normal and i don't tell traders sorry for their losses, i know that losing is part of the trading of this market, we have to always expect it. Trading the market with the use of our strategies of trust and management of our trading account and likewise the orders we opens are the important parts of trading. That is what i know that will not let traders to be having the margin call or get their account stopped out.

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    Registered user Silhouette's Avatar
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    Quote Originally Posted by Toyen View Post
    Losing is normal and i don't tell traders sorry for their losses, i know that losing is part of the trading of this market, we have to always expect it. Trading the market with the use of our strategies of trust and management of our trading account and likewise the orders we opens are the important parts of trading. That is what i know that will not let traders to be having the margin call or get their account stopped out.
    However it's important only to lose small from low risk trading because it's still considered as normal when we still able to manage everything according to our risk and money management. Once everything is going wrong against our rules, all the losses won't be categorized as normal anymore because it's a dangerous situation and we must stop trading at all cost. Stop out is the final warning that explain how bad we manage our risk and money in that account.

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    rules made to be followed, not to be broken

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    Registered user ola4real's Avatar
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    Quote Originally Posted by Krosneles View Post
    Thank you for compassion but I do not regret about this bad my experience of getting stop outs. I had little size accounts that had been burned and stop outs gave me the lessons what not to do or that losing orders should be cut immidiately and good money management should be used. I think that everybody has this bad experience and good lesson for the future.
    I don't like to pity forex traders, I only like them to realize their mistakes and make correction to it. Mistakes or no mistakes, forex traders can still lose all their investments, that is why it is important to the forex trader to be trading with the necessary money and risk management irrespective of what they know about this forex market. Forex traders should never under play with the use of their forex strategies and the possible management to use with it.

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    Registered user Sascha's Avatar
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    Quote Originally Posted by ola4real View Post
    I don't like to pity forex traders, I only like them to realize their mistakes and make correction to it. Mistakes or no mistakes, forex traders can still lose all their investments, that is why it is important to the forex trader to be trading with the necessary money and risk management irrespective of what they know about this forex market. Forex traders should never under play with the use of their forex strategies and the possible management to use with it.
    we're all been in the worse situations with losses and failures. no need to feel sorry for ourselves or blame everything as our fault because it won't help us to improve. accept everything and realize that we're still needing more knowledge and experience about this business. then we got to stop any real trading activity and return to demo practice where we can re-evaluate our trading strategies and learn how to manage our risk properly.

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