Quoting mkkrDislikedIBFX does the margin call when your EQUITY reaches 50% Not your margin balance. which means you lose more money. (believe it or not I like it that way)Ignored
Margin Levels and Margin Calls 21 replies
Margin/Free Margin/Equity 11 replies
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difference between Usable Margin and Used Margin 9 replies
Understanding Margin and Margin Calls 0 replies
Quoting mkkrDislikedIBFX does the margin call when your EQUITY reaches 50% Not your margin balance. which means you lose more money. (believe it or not I like it that way)Ignored
Quoting mrmikalDislikedAs stated previously...it varies by broker. IBFX has a more restrictive rule. They just want to keep you trading...and you can't trade if you don't have money.Ignored
Quoting dscott5912DislikedAs mrmikal stated, it definitely depends on your broker. For example:
IBFX's Policy: If Margin level drops below 50%, IBFX will begin randomly closing open positions until Margin level goes above 50%.
FXDD's Policy: If Margin level drops below 80%, all open positions will be closed.
So, it's not a case of Margin balance as it is Margin level. But you just need to check with your broker.Ignored
Quoting mrmikalDisliked
As stated above, they state that if your MARGIN LEVEL drops below 80%, then your open positions will be liquidated. To them, MARGIN LEVEL is how much margin you have put up in positions...Ignored
Quoting mrmikalDislikedI wanted to bump this thread only because I got clarification from FXDD about how they do margin calls (if anyone is interested).
As stated above, they state that if your MARGIN LEVEL drops below 80%, then your open positions will be liquidated. To them, MARGIN LEVEL is how much margin you have put up in positions...
So, let's take an easy example...say you have $5,000 USD in your standard account (100:1 margin) and you take out a 1 standard lot of the USD/JPY (margin of $1,000 required).
Your MARGIN LEVEL at break-even is 500% (because the margin required is $1,000 and you have $5,000 in your account). In order to get to 80% MARGIN LEVEL, your 1 standard lot position has to LOSE $4,200 before it is liquidated ($1,000 is the required margin and 80% of $1,000 is $800. $5,000 - $800 = $4,200).
I have not qualified this with Interbank FX, but MARGIN LEVEL seems to be a Meta Trader term.Ignored
Quoting mrmikalDislikedSo, let's take an easy example...say you have $5,000 USD in your standard account (100:1 margin) and you take out a 1 standard lot of the USD/JPY (margin of $1,000 required).Ignored
QuoteDislikedYour MARGIN LEVEL at break-even is 500% (because the margin required is $1,000 and you have $5,000 in your account). In order to get to 80% MARGIN LEVEL, your 1 standard lot position has to LOSE $4,200 before it is liquidated ($1,000 is the required margin and 80% of $1,000 is $800. $5,000 - $800 = $4,200).
Quoting PeterFMDislikedJust some clarification for me, please. In this example I take it that you have a 20% risk on this trade?So, if the trade goes more that 4 pips against you your position is closed by the broker?
I assume this is why I've read advice to only trade micro lots on this size of account and keep to 1% - 2% risk per trade(s)?
This post is for my clarification only, and not any criticism of the points raisedIgnored
QuoteDislikedAs listed in our terms and conditions: At Margin level less than 10% the Company has a discretionary right to begin closing positions starting from most unprofitable. If Margin level is equal or less than 5%, all positions are automatically closed at market price.
QuoteDislikedAn FXTrade account will receive a margin call when the margin required becomes twice the Net Asset Value of the account (or, in other words, if the margin required divided by two becomes larger than the net asset value of the account). A margin call results in an automatic closing of all open positions.