Margin Levels and Margin Calls - Page 2
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Thread: Margin Levels and Margin Calls

  1. #11
    Quote Originally Posted by ;
    margin level = current equity in the account / current amount of margin in usage

    I've heard that brokers can make margin calls when margin levels are at 50%, sometimes 80%. I do not understand why this is the case.

    I would believe that as long as the equity in the account is equal to or higher than the sum required to open the position that the trade may be sustained.
    Margin call differs of course for different brokers, and it is also can differ on the types of accounts. So for small accounts it is larger (such as 60%) and for larger accounts it is smaller (like 30%). Determined by your deposit. So if you're in a position to generate a huge deposit, broker will think of you as more reliable person. People have already written the whole math about it, so I will not do it again.

  2. #12
    Quote Originally Posted by ;
    Margin call differs of course for different brokers, and it's also can be different on the sorts of accounts. So for small accounts it's larger (like 60 percent) and for larger accounts it's smaller (like 30 percent). Determined by your deposit. So if you are able to make a huge deposit, broker will consider you as more reliable individual. People have written the whole math about it, so that I will not do it again.
    From what I could tell you've got nothing to offer and don't really know what you are talking about. I hope no one takes you seriously. After seeing some of the other articles this pointless post is the last straw for me and you are relegated to the ignore list.

    ....

    As for the response for pipsel, without actually looking at this and giving much of a damn, I suspect the difference in outcomes is due to mt4 taking into consideration the conversion in the account currency to quote currency before and after a trade whereas the poster is not doing this and is doing the math as though their account is currently in CHF. The trade is, after all, account ccy quote ccy base ccy, and then reverse once closed.

    Or something like that.

  3. #13
    2 Attachment(s) I'm wondering how can I skip those test, were I have a floating -6%! Or is allready to risky


    Quote Originally Posted by ;
    quote Balance plus/minus profit/loss = Equity Equity minus used (required) margin = accessible (or free) margin

    Example: Balance is 10,000 with an
    open position of 1 lot
    that is losing 20 pips.
    Margin required is 1000.
    P/L is 20x10 = 200.
    Equity is 9800,
    and completely free margin 8800 (equity less margin currently in use).
    Which gives you a margin level of 980%.
    Https://forexintuitive.com/forex-tra...g-journal.html

    Lets say I have a fundamental 1000 usd account for testing.
    The leverage is 100:1
    Min lot to trade will be 0.01 lot (micro lot)

    If the GBP/USD price is 1.5000, afterward for 0.01 lot it's required 1.5 * 0.01 * 100,000 / 100 = 15 usd as margin.
    For every 0.01 transaction size it's required 15 usd for margin - around.
    0.04 commerce size require 61.83 usd atm.

    Lets see if I have 6% floating minus:
    1000 - 6% = 940 is your Equity.
    Complimentary margin = 940 -60 = 880

    Margin level % = 100 * 880 / 60 = 1466% (if 4 x 0.01 commerce position)


    But if the - 6% is created by 1 bigger trade size or a sum of transactions , which are nearly at BE. Some are using even 0.89 lot from 42th entry:
    Ex 0.4 lot. (used 40:1 leverage instead of 4:1)
    Equity is 940 , same
    Free margin is 940 - 600 = 340
    Margin level % = 100 * 880 / 340 = 258% (if 4 x 0.1 commerce position)

    what is the acceptable percentage?

    -60 usd using 0.04 size it need like -120 pip movement, while the 0.4 size just -12 pip!

    I have a floating loss of under 1 percent , but here is a better dimension: I don't have a massive position with -10-20 pip , but a smaller one with bigger pips =gt; maybe not in the upcoming seconds is your margin call.

  4. #14
    1 Attachment(s)
    Quote Originally Posted by ;
    Hi, I've an Issue about the AccountEquity() value Within an MT4 backtest I'm doing. The Account Balance is $2000 The Base CCY is USD The TickValue as reported by MT4 is $9.31 I take a brief position on USDCHF of 0.01 lots @ 1.70370. Leverage is 500:1 so required margin is only $2. The price moves against me to 1.82902, that is a move of 0.12532 or even 1253.2 pips. My drawdown calculation is: 1253 (pips) * 9.31 (pip Value) * 0.01 (lots) = $116.67 (a drawdown of $116.67). Nevertheless MT4 is reporting my AccountEquity() is $1928.75. (that is only...
    I've entered there that the lot dimensions 0.01

    Pip value is 0.103 usd atm

    Inserted Code double PipValue=0.0001; int OnInit() { //-- point=Point; if((Digits==3) || (Digits==5)) point*=10; if(Digits==2 || Digits==3) PipValue=PipValue*100; should(Digits== 4 || Digits == 5) PipValue = PipValue; int OnCalculate(const int rates_total, const int prev_calculated, const datetime time#91;#93;, const double open#91;#93;, const double high#91;#93;, const double non#91;#93;, const double close#91;#93;, const extended tick_volume#91;#93;, const long volume#91;#93;, const int disperse#91;#93;-RRB- { //-- series DepositCurrency=AccountInfoString(ACCOUNT_CURRENCY ); PipValues=-LRB-((MarketInfo(Symbol(),MODE_TICKVALUE)*point)/MarketInfo(Symbol(),MODE_TICKSIZE))*LotSize); //-- ObjectSetText(Label_Lot_Lev, Lot/Lev : DoubleToStr(LotSize,2) / DoubleToStr(leverage,0),10,Courier New,labelcolor); ObjectSetText(Label_PipVal, Pip Val : DoubleToStr(PipValues,3) DepositCurrency,10,Courier New,labelcolor); https://forexintuitive.com/forex-tra...avy-train.html

  5. #15
    Hi every body
    I'm not a pro forex trader, I wish to know what margin call level is? Why different account type has different margin call level? Is it better that our account comes with a higher level or lower? Would you please help me? Thanks.

  6. #16
    Various brokers provide different margin call and stopout levels. Basically the higher the margin call and stopout degree the more safe your account is. In precisely the exact same time the higher these amounts are the less room you've got for your own trades. The smaller the margin call amount the more room you've got to your trades but less safer your account is. Lets say one brokers stopout is at 100 % and you've got 1000 USD Balance with a commerce requiring 200 Margin in case it hits the stopout you'll be left with 200 USD. If your stopout degree is 20 percent with 1000 equilibrium and commerce necessitating 200 margin the stopout will give you 40 USD. Hope that helps.

  7. #17
    Quote Originally Posted by ;
    Different brokers provide different margin call and stopout amounts. Basically the higher the margin call and stopout degree the secure your account is. At exactly the same time the higher these amounts are the less room you've got for your own trades. The smaller the margin call amount the more room you've got to your trades safer your account is. Lets say one brokers stopout is currently at 100 % and you've got 1000 USD Balance with a trade requiring 200 Margin in case it strikes the stopout you will be left with 200 USD. If your stopout degree is 20 % with 1000 balance and...
    Imo, its not very correct to talk about safety of trader account in terms of different MC or SO levels. Safe trading is when you consistently control your risks, trading appropriate lot size and using stop loss. SO and high MC is protection for brokers which protect themselves. The sooner they close your account in times of reduced liquidity (in case your position in drawdown) the less are risks for them to get reductions.

  8. #18
    Quote Originally Posted by ;
    quote Imo, its not very correct to discuss safety of trader account concerning distinct MC or SO levels. Safe trading is when you control your risks, trading lot size and using stop loss. High MC and SO is protection for brokers which shield themselves from liquidity issues. The earlier they close your account in times of low liquidity (in case your position at drawdown) the less are risks for them to get reductions.
    Yes certain you are correct too regarding the brokers facet. However, the topic is all about margin calls and levels and you are speaking about risk management. Of course if you have a proper risk management you shouldn't get to a margin call and also the smaller margin call and SO levels will be better. But without a suitable risk management the greater the Margin call levels the safer your account form reckless trading . Or lets say you have put a open commerce and forgot to set the Stoploss level and the trade has been on the wrong side of their GBPUSD during the flash crash and you wake up stopped out. What would you have preffered than Stopped out at 20% or in 100 percent ?

  9. #19
    Hello,

    I do not know whether I can describe it or not, but I will provide the attempt. Please correct me if I am wrong.

    Basically in your Metatrader platform or trading platform there are some languages that you should understand. That is 'balance', 'equity' and 'free margin'.

    Balance is your money that you deposited into the account and will not change until the last calculation. E.g. if you open position and liquidate it. It'll change your balance account no. .

    As for equity and margin is the amount that constantly changes. If you open position the margin and equity will be changed depend on your own open position whether it's profit or not. So basically your asset is the equity. When the margin is diminishing in value around 80% percentage of your equity. You will get a margin call.

    That is why it's important not to overtrade. As place that in position will reduce your equity and margin.

    I think that is it, I hope I will explain it enough for you. But I do think it's still lacking of details. GOD... it's hard to become a teacher or informant. Everyone can fix my information? Appreciated. Thank you.

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