Margin Call and stop-out
Page 1 of 326 123451151101 ... LastLast
Results 1 to 10 of 3566

Thread: Margin Call and stop-out

Hybrid View

Previous Post Previous Post   Next Post Next Post
  1. #1
    Super Moderator RoboForex Trader's Avatar
    Join Date
    Dec 2012
    Posts
    489
    Thumbs Up
    Received: 142
    Given: 33

    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.

    Not allowed!

  2. #2
    Super Moderator RoboForex Trader's Avatar
    Join Date
    Dec 2012
    Posts
    489
    Thumbs Up
    Received: 142
    Given: 33

    Margin Call

    The regulations prescribed different values ​​for different types of account. As the most popular are cent accounts, they will be considered in the example.

    12.3.1 Margin Call value makes 40% for Fix-Cent and Pro-Cent accounts on MetaTrader 4 and Metatrader 5.
    It means, as soon as the level of value approaching the mark of 40% the bottom tab "Trade" in the terminal, where balance, equity, level and order’s opening are displayed, becomes red. This light remains as long as the client deposit the account, or until the level is changed to a higher number. In case of reduction and passing mark of 10% Stop Out comes.

    On weekends, many brokers increase the level of Margin Call, but do not mix it up with a Stop Out level. On weekends, there are jumps in prices, so the broker warns about this issue by the Margin Call increase (such a request upon to deposit funds in case the price flare-up will be on Monday).

    Likewise, everything is with other types of account, the different in values only.

    There is an extract from the Regulations:

    12.3.2
    Margin Call value makes 40% for Fix-Standard and Pro-Standard accounts on MetaTrader 4 and Metatrader 5.

    12.3.3
    Margin Call value makes 60% for Fix-ECN and Pro-ECN accounts on MetaTrader 4 and Metatrader 5.

    12.3.4
    Margin Call value makes 60% Pro-ECN accounts on cTrader.

    Not allowed!

  3. #3
    Banned
    Join Date
    Oct 2013
    Posts
    11,246
    Thumbs Up
    Received: 241
    Given: 193
    margin call is the lowest situation for traders where they have an emergency situation at forex trading, and of course, if they can not calculate or manage the business, it always come up and become our parts, then there are some methods or thing to control our trading forex and avoid it, we need to learn about money management or risk management, how to handle unwanted situation and let the mind to think with clear, no emotion,
    some traders will make percentages to set stop loss, this is the way to protect our balance from margin call,

    Not allowed!

  4. #4
    Banned
    Join Date
    Oct 2013
    Posts
    11,246
    Thumbs Up
    Received: 241
    Given: 193
    every brokers have their own rules for margin call, and i heard at roboforex, margin call is set 40% , it is god number for trading because the traders will have much chances to fix the problem for trading forex, and also if they set the lots size or volume wisely, it will give the chances the traders to think or consider for making deposit or do action to protect balance

    Not allowed!

  5. #5
    Trader
    Join Date
    Aug 2013
    Location
    Male
    Posts
    1,955
    Thumbs Up
    Received: 18
    Given: 16
    Quote Originally Posted by RoboForex Trader View Post
    The regulations prescribed different values ​​for different types of account. As the most popular are cent accounts, they will be considered in the example.



    It means, as soon as the level of value approaching the mark of 40% the bottom tab "Trade" in the terminal, where balance, equity, level and order’s opening are displayed, becomes red. This light remains as long as the client deposit the account, or until the level is changed to a higher number. In case of reduction and passing mark of 10% Stop Out comes.

    On weekends, many brokers increase the level of Margin Call, but do not mix it up with a Stop Out level. On weekends, there are jumps in prices, so the broker warns about this issue by the Margin Call increase (such a request upon to deposit funds in case the price flare-up will be on Monday).

    Likewise, everything is with other types of account, the different in values only.

    There is an extract from the Regulations:
    Through this thread I came to learn elaborately about margin call and stop-0ut. I am now running with huge floating loss and trying to reduce the floating loss. By this time I have cut down some trades and hoping to avoid margin call.

    Not allowed!

  6. #6
    Trader rinaji's Avatar
    Join Date
    May 2013
    Posts
    3,839
    Thumbs Up
    Received: 207
    Given: 311
    Quote Originally Posted by Hukam View Post
    The safest way to do trade will be our leverage selection margin call and stop out problem can create a big problem for a trader some time a trader should control himself at the time of trading because of greed a trader start to do high risky trading and because of high leverage selection he just make buy, sell and use high lot sizes which lead to loss only but a low leverage selection will not give any big problem at the time of trading
    Logically we can control risk although we use high leverage, so there is no significant influence if we can implement risk management when we use high leverage, but if we are still difficult to control our emotions and greed, then better we use lower leverage.
    Quote Originally Posted by silverlady View Post
    I do not like wither of the margin call or the stop out levels in the market, it does not help the trader to move forwards in what they are doing in the market, and the cause is the trader. This is why forex traders should try in all what they can do to do things right, and mostly manage the account properly to avoid this.
    Quote Originally Posted by COMANG View Post
    Most traders get margin call in the course of trade is strongly associated with how they use the money well or bad management if they are already using money management rules are bad then I think this will make them easier to get this trade will be a margin call and vice versa if traders to trade with good trading money management then they will be able to avoid a margin call
    Yep, of course, a margin call and stop out is an annoying thing , but that does not mean we should despair when getting a margin call and stop out. Depending on how we manage all of our capital, because a margin call can be used as a delimiter risk if we use low leverage. Similarly with trade using stop loss. So also with stop out, it can be used as a limiter of risk if we can manage our deposits.

    Not allowed!
    If you lose, be patient. If you win, stay humble

  7. #7
    Trader
    Join Date
    Feb 2016
    Posts
    41
    Thumbs Up
    Received: 2
    Given: 0
    Quote Originally Posted by RoboForex Trader View Post
    The regulations prescribed different values ​​for different types of account. As the most popular are cent accounts, they will be considered in the example.



    It means, as soon as the level of value approaching the mark of 40% the bottom tab "Trade" in the terminal, where balance, equity, level and order’s opening are displayed, becomes red. This light remains as long as the client deposit the account, or until the level is changed to a higher number. In case of reduction and passing mark of 10% Stop Out comes.

    On weekends, many brokers increase the level of Margin Call, but do not mix it up with a Stop Out level. On weekends, there are jumps in prices, so the broker warns about this issue by the Margin Call increase (such a request upon to deposit funds in case the price flare-up will be on Monday).

    Likewise, everything is with other types of account, the different in values only.

    There is an extract from the Regulations:
    thats a very good explanation since most new traders confuse the two or they do not understand their meanings. It important for everytrader to understand the implications of the two in terms of their trading activity so that issues may not arise lateron with the broker if one finds that their open orders were closed automatically to safeguard the account

    Not allowed!

  8. #8
    Trader Silhouette's Avatar
    Join Date
    May 2016
    Posts
    2,506
    Thumbs Up
    Received: 41
    Given: 42
    Quote Originally Posted by RoboForex Trader View Post
    It means, as soon as the level of value approaching the mark of 40% the bottom tab "Trade" in the terminal, where balance, equity, level and order’s opening are displayed, becomes red.
    when they all becomes red, then all we gotta do are to invest more or just let our account be dead. of course, we should all not blame ourself because of the mistakes we have made. mistakes are normal thing and we must find better experience to learn from them. real experience and learning costs expensive and sometime it sacrifices our money too. we can avoid this situation once we know how to manage our trade using money management and improved trading skills.

    Not allowed!

  9. #9
    Trader
    Join Date
    Jan 2017
    Posts
    8,834
    Thumbs Up
    Received: 26
    Given: 17
    Quote Originally Posted by Silhouette View Post
    when they all becomes red, then all we gotta do are to invest more or just let our account be dead. of course, we should all not blame ourself because of the mistakes we have made. mistakes are normal thing and we must find better experience to learn from them. real experience and learning costs expensive and sometime it sacrifices our money too. we can avoid this situation once we know how to manage our trade using money management and improved trading skills.
    at margin call situations, sometimes we got panic and felt bad to see the situations, yes, there is an options we can do , we can make more invest the money but the risk is too big because sometimes we loss the fresh money too, and if we hold the position without do an action and just wait for a luck, that is risky too and as the consequences that we will loss the account if the price still against us, for this part, that's why we need good risk managements to reduce this problems, better to cut loses with small loses than we have to blow all of them

    Not allowed!

  10. #10
    Banned
    Join Date
    Jun 2016
    Posts
    7,710
    Thumbs Up
    Received: 13
    Given: 14
    Quote Originally Posted by mr.big View Post
    at margin call situations, sometimes we got panic and felt bad to see the situations, yes, there is an options we can do , we can make more invest the money but the risk is too big because sometimes we loss the fresh money too, and if we hold the position without do an action and just wait for a luck, that is risky too and as the consequences that we will loss the account if the price still against us, for this part, that's why we need good risk managements to reduce this problems, better to cut loses with small loses than we have to blow all of them
    I see it as a big mistake for a trader to get margin call, it shows that the trader can not make money, there are more to learn. Because when the trader has learned and understand the market, then they can make money without having margin call. SO with that been said, that is the more reason why the learning process is needed to be done on demo account.

    Not allowed!

Page 1 of 326 123451151101 ... LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •