Navigating Margin Calls: Understanding, Prevention, and Resolution
Intermediate
Overview
In this section, we’ll provide you with a comprehensive understanding of margin calls, how they occur, strategies to avoid them, and steps to take if you find yourself facing a margin call. Let’s dive into the world of margin calls and ensure that you’re well-prepared to handle this critical aspect of forex trading.
A margin call serves as a crucial alert from your broker when your account's margin level hits a critical low.
To avoid margin calls, acquaint yourself with your broker's margin requirements, monitor your margin level, employ a stop loss tool, opt for a scaled-in strategy instead of overleveraging, and maintain emotional composure.
When confronted with a margin call, maintaining your composure is paramount. You have two choices – inject additional funds to meet margin requirements or close losing positions. Use this experience as a learning opportunity to fine-tune your trading strategy.