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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. #3531
    Trader Toyen's Avatar
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    Quote Originally Posted by ola4real View Post
    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
    What i know is that there is reason for everything which are happening in the market. We can trade and lose, and it will be explainable on where we are getting it wrong. Our own is to try and build up the necessary skills which will let us know when to trade and when not to trade. We have to develop the skills that will let us know how to likewise properly manage our trading account. All these will avoid margin call and stop-out.

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  3. #3532
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    Margin call means a bad thing is about to occur, like you are about to loss a whole lot of your money to the market. However, such could have been avoided in such a way that the trader could have been able to avoid such from happening by trading with the right use of money and risk management and also being the kind of trader who takes planning seriously and never to be impatient.

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  4. #3533
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    You have to be in good control on the way you trade the market. Margin call can be controlled by using a good trading strategy and strong analysis. Margin all has to be avoided from the onset by the trader being good with money and risk management and then on the other hand having to understand what they are required by their trading strategy.

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  5. #3534
    Trader layigold's Avatar
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    For those who have spent few times in forex trading , margin call and stop out need not be confused because it is what they must have experienced in trading . Margin call is what I would like to call " save our souls call", and that happens when you run out of margin to support your open positions because of the running losing positions.The next thing to do is to add some funds or better still close some of your losing trades to allow for some free margin. Failure to do either might eventually lead to stop out and that is a situation where some of your running trades are closed by force

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  6. #3535
    Trader Toyen's Avatar
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    Quote Originally Posted by Darkhorse View Post
    You have to be in good control on the way you trade the market. Margin call can be controlled by using a good trading strategy and strong analysis. Margin all has to be avoided from the onset by the trader being good with money and risk management and then on the other hand having to understand what they are required by their trading strategy.
    When traders are not in control of their trading, they will not be trading without losing. It is only the traders which have the control in their trading that will have the fullness of control in what they are doing. When traders are regular with margin call and stop out, it shows the trader is doing something wrongly, it has to be changed before the traders can have a stability of earnings in their trading.

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  7. #3536
    Trader Silhouette's Avatar
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    Quote Originally Posted by Toyen View Post
    When traders are not in control of their trading, they will not be trading without losing. It is only the traders which have the control in their trading that will have the fullness of control in what they are doing. When traders are regular with margin call and stop out, it shows the trader is doing something wrongly, it has to be changed before the traders can have a stability of earnings in their trading.
    Risk and money management mostly underrated by traders who simply thinks that forex trading can be done easily as long there's a strategy to analyze market. Well it does fulfill one requirement while there are more things traders needs to complete as well because a good strategy isn't enough to give us stable and consistent trading.

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    rules made to be followed, not to be broken

  8. #3537
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    Quote Originally Posted by Silhouette View Post
    Risk and money management mostly underrated by traders who simply thinks that forex trading can be done easily as long there's a strategy to analyze market. Well it does fulfill one requirement while there are more things traders needs to complete as well because a good strategy isn't enough to give us stable and consistent trading.
    There are some people who think earnings is possible without risk management and some people who think earning is possible without strategy, we should know both ways its impossible. Margin calls are hard to stand and then we need to make fresh investment to trade further, if this continues for certain time we are inn for serious troubles. Many of us see the bad picture because we trade with high risk and lack patience.

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  9. #3538
    Trader Yayami's Avatar
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    Quote Originally Posted by Abhishekwala View Post
    There are some people who think earnings is possible without risk management and some people who think earning is possible without strategy, we should know both ways its impossible. Margin calls are hard to stand and then we need to make fresh investment to trade further, if this continues for certain time we are inn for serious troubles. Many of us see the bad picture because we trade with high risk and lack patience.
    i supposed those who do this business with such expectation are gamblers not forex traders. only gamblers who think that way and always trade without having a strategy or risk management. often found many gamblers are losing their money soon after their winning trades which they got from luck. unfortunately luck will running out sooner then margin call or stop out will pay them a visit. it's about time for them to change the way they trade or want to repeat another mistakes with luck.

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  10. #3539
    Trader Toyen's Avatar
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    Quote Originally Posted by Silhouette View Post
    Risk and money management mostly underrated by traders who simply thinks that forex trading can be done easily as long there's a strategy to analyze market. Well it does fulfill one requirement while there are more things traders needs to complete as well because a good strategy isn't enough to give us stable and consistent trading.
    It is a bad idea for traders to be underrating the money and risk management, the money and risk management is the pillar of the surviving account in the market, it is good for us to use them. The traders with the best trading strategies will still find it hard to be successful when the trader is not trading with the proper use of money and risk management, we all need this and plan it in an effectual manner.

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  11. #3540
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    It is one of the most dangerous orders in the forex market is to find your account changed to the red color . and with some risk margin can occur , how do we protect our selves and accounts from being margin ed , i think that the management of the account is the most important issue for that and we have to study the trades very well .

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