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Thread: Margin Call and stop-out

  1. #1
    Super Moderator RoboForex Trader's Avatar
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    Margin Call and stop-out

    Lots of beginners are often confused about the concepts and terms. Let’s go to the page http://www.roboforex.com/beginner/glossary/

    Margin Call
    It’s the broker or dealer requirement for to deposit additional cash or other assets to guarantee discharge of obligations for a loss-making position of the client.

    Stop out
    It’s an order for the forced closure of positions without the customer's consent or any prior notice in case of a shortage of funds to maintain an open position.

    In case of funds shortage position is going to be eliminated and Margin Call comes. And during an account is coming near Stop Out, the Margin Call is declared, - it’s time for trader to make a decision whether to deposit an account or just waiting for Stop Out. The difference is that in case of the Margin Call transaction is still visible on the account but colored with red on the terminal display. This is a kind of warning level, beyond which the Stop Out can follow.

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  2. #3521
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    If a trader is not careful to manage their risk and build a better risk management plan to trade, they are likely to face margin calls or blow their capital. It's out of greed that so many newbies loose their investment and this have been so bad for newbies and have made it very difficult to come up with a profitable trade for themselves. It's too difficult to think that you can make it here when its obvious you lack what it takes to build profits for yourself. Better learning must be followed and as long as the plans is to make profits, we should be ready for such and take learning seriously.

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  3. #3522
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    Margin Call and Stop Out are the good signals that trader disregard risk and money management rules. These rules are the main key to success in forex market and traders should cut their losses earlier. It does not mean that traders are wrong in market direction but it means that traders are wrong in time and big leverage kills the account.

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  4. #3523
    Trader Toyen's Avatar
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    Quote Originally Posted by Krosneles View Post
    Margin Call and Stop Out are the good signals that trader disregard risk and money management rules. These rules are the main key to success in forex market and traders should cut their losses earlier. It does not mean that traders are wrong in market direction but it means that traders are wrong in time and big leverage kills the account.
    It might be true, the traders that are working with their protective skills and management will never achieve margin call. When traders have margin call, it is a sign that the trader is not doing what they supposed to do, it could be in terms of the bad trading strategies of that trader, it could be in terms of the poor management which the trader is using to trade the market. It is wrong for traders to be having margin call or stop-out, this is like wasting your capital easily.

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  5. #3524
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    Quote Originally Posted by Toyen View Post
    It might be true, the traders that are working with their protective skills and management will never achieve margin call. When traders have margin call, it is a sign that the trader is not doing what they supposed to do,
    margin call is normal if we do not have management, whenever we people try to earn big we can not survive, when we people uses some big risks we use big lots we can lose and with big lot we can easily get margin call, so its good if we have proper management we can secure self, if we do not have security in trading we can lose all, so make sure you have some limits it can save you from margin call

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  6. #3525
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    Margin call means that you have taken bad trades and then you are about to loss most of your money. It is important to know the reason why we have been having margin call, some of the factor has always been that we have bad trades been taken, so we need to learn and then know how to correct those mistakes, we shouldn't keep on taking huge risks in expectation to make more money.

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  7. #3526
    Trader cutiekc's Avatar
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    Margin call means you have lost it all, but then again, we all must have been in such a situation, be it the real account or on the demo account and what matters is that we get to learn and know how to avoid it from happening again, from my knowledge, we just need to be the sort of trader that takes good analysis and follows the market adequately with good trading risk management.

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  8. #3527
    Trader ict2014's Avatar
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    A margin call means an alarming position of a trading account. No one here who like this but daily it occurs in the uncountable account daily. Two important things are responsible for this first one not follow money management and second one bad entry. Both the reason every trader are well known sad in things it has been not stopped. what power behind this? Just trader sincerity and consciousness is enough to stop and continue positive trade.

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  9. #3528
    Trader Sascha's Avatar
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    Quote Originally Posted by ict2014 View Post
    A margin call means an alarming position of a trading account. No one here who like this but daily it occurs in the uncountable account daily. Two important things are responsible for this first one not follow money management and second one bad entry. Both the reason every trader are well known sad in things it has been not stopped. what power behind this? Just trader sincerity and consciousness is enough to stop and continue positive trade.
    each traders has their own reasons for getting margin call and stop out. i can't exactly tell what are the reasons but for me, i lost couple trades and my account in stop out were because my own impatience in making decision and i was lacking of confidence. thanks to those bad experience now i'm becoming a better trader with new knowledge to learn and new experience to have.

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  10. #3529
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    Quote Originally Posted by Sascha View Post
    each traders has their own reasons for getting margin call and stop out. i can't exactly tell what are the reasons but for me, i lost couple trades and my account in stop out were because my own impatience in making decision and i was lacking of confidence. thanks to those bad experience now i'm becoming a better trader with new knowledge to learn and new experience to have.
    Impatience is surely the leader of the causes behind margin calls. If we look closely at it, due to impatience we cannot follow risk management or cannot wait till we get the right kind of setup to trade. Obviously if we are well skilled we can make good profit with our capital. Beginners dont know about dealing with the risk and so they can first try the demo account.

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  11. #3530
    Trader ola4real's Avatar
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    Quote Originally Posted by Sascha View Post
    each traders has their own reasons for getting margin call and stop out. i can't exactly tell what are the reasons but for me, i lost couple trades and my account in stop out were because my own impatience in making decision and i was lacking of confidence. thanks to those bad experience now i'm becoming a better trader with new knowledge to learn and new experience to have.
    There is no genuine reason to have margin call, forex traders should plan their trading from the beginning to the end, that is what will not let them to lose their forex invest. Margin call is a bad thing, forex traders can avoid it if they have the opportunity to be trading with a solid forex system who can be used with good strategy and management together, that is the power for safety of forex traders account

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