Margin Call is a notification which alerts you that you need to deposit more money in your trading account, or close losing positions, to free up margin. Margin Call is denoted as a fixed percentage, determined by the broker. You can find the Margin Call percentage in the Account Specifications of your trading account. When the market is moving against your open positions and the Margin level falls to the Margin Call percentage, you can expect to receive a Margin Call warning on your device. In other words, it is a warning for the trader that the Stop Out level is approaching. In the example here, the trader is getting closer and closer to a Margin Call. Do not forget that your Margin Level is your Equity divided by Used Margin, times a hundred. If his Margin Level decreases further, to 40%, he will get a Margin Call. So it is important for a trader to always keep an eye on his Margin Level.
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What is Free Margin?
What Is Stop Out?
Since we have already covered Free Margin and Margin Call, it is now time to look at Stop Out. In forex trading, Stop Out is the level at which the broker starts closing automatically (“liquidating”) all of his least-profitable open positions in the foreign exchange...
