So I’m still new to forex and getting my feet wet. But what is the best way to figure out a way to not hit margin call if I am trading with micro lots and 50:1 leverage.
I used a position size calculator and my equity right now is $500 I want to have a risk of 2% now for example on my calculator if I put 50 pips for S/L it shows I can open 2 micro lots and put down $20 equity but if I do S/L at 100 then I can only open 1 microlot and use $10 equity.
Can someone explain this better to me because some of these zulutraders when trading there drawdown can get to like -200 pips so I need to see how many lots and open positions I can do without getting margin called.
I know that -200 pips would be $20, so do I need to make sure when having open trades that the pips do not go over my equity of $500?
Thanks in advance
Your stop loss would take out your trade at 2% so you’d not lose anywhere near your £500.
You’d need to have a hell of a lot of open trades to have use up all your margin, a lot more than you’re likely to use if you’re being sensible with your approach.
I’m not competent enough to work this out for you but if you’re only trading 2% a trade, I wouldn’t imagine that you have to consider a margin call.
You need to find out exactly at what equity point your broker will margin call you. It can vary a bit. From there, just work back based on pip values to how many pips that would take and you’ll have it. For example, if you’d get margin called after a 50% loss, that’s $250 on your account. At $1/pip you could handle a 250 drawdown.
What he said ^