Hi
Lets say that I start with US$ 10,000 balance, and it goes down to US$ 3,000 but my equity on open trades is at US$ 8,000. Which one is used to calculate the margin call? If my balance goes to much down then my trades are in risk of being closed even tough the equity is high? In that case the broker will start to close the open positions to cover?
you have 10000 capital. you enter trades which require margin if 2000. when your capital falls down to 2000 you get margun called.
you habe 10000
you enter trades which require 8000 margin
you fall dowm to 8000 you get margin called
you got capital of 10000
you enter trades which require margin of 6000
you loose 4000 on your trades you get margin called
you got capital of 10000
you enter trades which require margine of 5500
you loose 4500 on yourctrades you will ger margin called
Hello and welcome…
Turbo gave a good explanation…
Another way to do this, which is what
I use with my broker (FXCM) is looking
at the ‘usable maintenance margin’ percentage:
when it gets close to or below 50% then you
may expect a margin call…
This spares you having to make any calculations
but sums up your account situation in one
neat figure, in terms of closeness to getting
a margin call 