Tuesday, 2 September 2008

ForexGen | Margin Call

Margin call is something that you will have to be aware of.
If for any reason the
broker thinks that your position is in danger e.g. you have a position of $100,000 with a margin of one percent ($1,000) and your losses are approaching your margin ($1,000). He will call you and either ask you to deposit more money, or close your position to limit your risk and his risk.
Margin call is actually a good thing. It safeguards you and your
broker.
Some
traders become so emotionally involved with their position that they are in cable of making a rational decision.
If a margin call is exercised it will safeguard the
trader from further losses.

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