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Margin call

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Margin call - If you don't know as a Forex trader, margin call is a call from your broker to send more money to restore you from a position that has moved against you. The following 17 closely guarded secrets will go along way in helping you avoid getting margin calls as a Forex trader. Learn and apply them in all your trading decisions and activities to truly conquer the Forex market.

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Margin call

  1. 1. LIVETOPNEWS.INFO MARGIN CALL HOME PRIVACY ARCHIVE GO MARGIN CALL   margin-call.png If you dont know as a Forex trader, margin call is a call from your broker to send more money to restore you from a position that has moved against you. The following 17 closely guarded secrets will go along way in helping you avoid getting margin calls as a Forex trader. Learn and apply them in all your trading decisions and activities to truly conquer the Forex market. Share | Friday, 14 October, 2011, 3:52 AM Posted by banie MARGIN CALL Protecting Your Forex Account From Margin Call - 17 Closely Guarded Trading Secrets By Adeola Salami If you dont know as a Forex trader, margin call is a call from your broker to send more money to restore you from a position that has moved against you. The following 17 closely guarded secrets will go along way in helping you avoid getting margin calls as a Forex trader. Learn and apply them in all your trading decisions and activities to truly conquer the Forex market. 1. Never expose more than 30% of your account in trading: One of the safest things for you to stay long enough in the market is to only expose a maximum of 30% or even less of your account In trading. For a trader who has opened a Forex account with $1000, exposing 30% of $1000 means trading with a maximum of 3(30k account mini lots or 0.3 volume), but for a beginner I will recommend 0.01 in volume(micro lot) minimum and a maximum of 0.1 in volume (mini lot). Although some aggressive traders expose up to 50% of their account. 2. Never Risk More Than 3% of Your Core Equity or Free Margin: This cannot be oversized, with your $1000 risking more than 3% means setting a stop loss of $30 (3% of $1000 =$30). As your account grows you can reduce to 2% or even 1%. You need to calculate how many pips in mini lot or 3 mini lots will amount to $20 or $30 or even less with higher probability that you will not be stopped with a loss. If for example I decide to risk 2% ($20) trading 10%
  2. 2. of my $1000 account, my stop loss could be placed 20pips away from my entryprice. Remember 1pip in mini lot is $1.3. Never Allow Maximum Draw Down on your account: Draw down occurswhen you lose and your account balance drops from the original balance. If atrader loses $500 out of $1000 of the initial capital, this is 50% draw down andis called a maximum draw down. You will need to make 100% profit to get backon to your initial $1000. This is more difficult if not frustrating to get this back tothe previous balance given the king of spirits that operate the Forex market,greed, fear and anxiety will begin taking over the trader.4. Never trade without being sure of the main or primary trend of themarket: Some traders ignorantly trade positions against the main trend of themarket. We have traders who have so much developed themselves with greatstrategies for counter trending the market, please, if this is not your style,never try it. Always find the primary trend and go with the trend when themarket provides opportunities in that direction. Remember the popular slogan"the trend is your friend until it bends."5. Never use a broker where you do not understand their policy andoperating platform: Make sure you study, ask questions and understandyour brokers operating policy, trading platform and other activities. Make sureyour broker of choice is registered and regulated in their country of operation.Find out what their margin call policy is all about and make sure you abide bythe policy agreement.6. Never calculate trading profits and losses in dollars: Calculate inPIPS. When you calculate in dollars you often put yourself under unnecessarypressure.7. Never borrow to trade: Borrow to trade will mount pressure on you. Tosucceed as a trader, you must of necessity avoid anything that will put youunder unnecessary pressure. Some pressure can lead to serious mistakes.Avoid them always.8. Never invest to trade any money that will in any way alter yourcurrent lifestyle: Do not sell your shop or shares or put your salary fromwhich you will use to take care of your family into trading. There will be so muchpressure on you that will make you trade anytime the pip moves.9. Never use slow or snail speed Internet Service for trading. Youwouldnt want to develop heart attack because your connection is misbehavingwhen you are about taking crucial trading decisions or when you are already ina crucial trade you need to monitor10. Never over-trade:Sometimes trading more than 2 positions at a timecould constitute over-trading.11. Never trade multiple currencies:Always master the characteristics ofone currency pair,particularly a mild pair like EURUSD. Trading multiplecurrencies can make you ignore,margin call warnings without being aware if it.12. Never let your losses exceed your free or Usable Margin (or callequity):For instance assuming you you have opened your trading account with$1000.Trading with 3 mini lots,which is 0.3 volumes (300), your used margin isnow $300, while your free margin is $700,thus if you let your losses get to $800or more ,this is of course more than youre your free margin, you willimmediately get a margin call and all your open positions will be closed13. Never let your Margin% fall below your brokers requiredthreshold:A s k t o f i n d o u t f r o m y o u r b r o k e r . W h e n y o u h a v e o p e n
  3. 3. trades,always monitor what is happening to your margin. Some margin calls occur when your margin falls below 30%,some brokers call at 20%. Find out from your broker through chat or otherwise. 14. Never be unaware of News Event:Even if you are not a news trader, always make sure you daily or weekly monitor the Economic calendar to know when news events or fundamental announcements will be made. Close all open positions 10 to 20 minutes before major Economic news 15. Never trade without Reviewing your trading goals and plans:It is not enough to have trading plans and goals ,always review them. This will help you know when to stop and evaluate your activities. So that you dont blindly run into margin calls. 16. Never trade without the right mindset: There is a mindset every trader who desires to succeed in trading must possess. If you lack this mindset be prepared for untold hardship in the market. Greed,Fear,and Anxiety are the trio I call the 3 dreaded demons in the Forex market. 17. Never take a trade without Praying:You need direction from God, especially when it comes to knowing the trend of the market and joining the trend early. Divine guidance is significant, never do anything solely by your power and might. To your online business success ADEOLA SALAMI. http://onlinejobempire.wordpress.com http://onlineforexstrategies.blogspot.com Share | Friday, 14 October, 2011, 3:52 AM Posted by banie    COPYRIGHT (C) 2011 LIVETOPNEWS.INFO. ALL RIGHTS RESERVED.

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