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Margin

Bitcoin is going to the Moon PART 2! [S #3 B]How nice, hit all 3 targets from the original post in not even 2 days... NOW FOR PART TWO! I have added a few more targets, TP4, TP5, and TP6. We are currently going up high in altitude and going to be reaching our planet's atmosphere very soon! We should the reach the moon in no time! Bitcoin may dip a bit from the current price but should still make a new ATH. I will be going a bit into what I call my "special indicator" that successfully helped me make the last few recent signals. I call it "MarketAnalyzer FX Alpha 1" and it honestly has been doing a splendid job. It is pointing upwards for Bitcoin, hopefully it won't take too long to hit our next target. Entry: ***USE LOW LEVERAGE IF ANY AT ALL*** $79,200-$80,000 (Original posts entry) If you have not entered yet, new entry could be $86,000-$89,000 TP1: $82,742 ✅ TP2: $85,132 ✅ TP3: $82,742 ✅ TP4: $90,800 TP5: $98,200 TP6: $110,000 For those that have the good entry of $79k-$80k I would move SL to entry. If entering the current entry point, $85,000. ---------------------------------------------------------------------------------------------- ***ALL ANALYSIS, SIGNALS, AND ANY CONTENT IS FOR EDUCATIONAL PURPOSES ONLY AND ARE NOT MEANT TO BE PROFITED OFF.*** ----------------------------------------------------------------------------------------------
Long
by MarketAnalyzerFX
Understanding Trading Leverage and Margin.When you first dive into trading, you’ll often hear about leverage and margin . These two concepts are powerful tools that can amplify your profits, but they also come with significant risks. The image you've provided lays out the essentials of leverage and margin: Leverage allows traders to control larger positions, Margin acts as a security deposit, Profit Amplification boosts potential gains, and Risk Amplification warns of increased losses. In this article, we’ll break down these terms and explore how leverage and margin work, their advantages and risks, and what to consider before using them in your trading strategy. What is Leverage in Trading? Leverage is essentially a loan provided by your broker that allows you to open larger trading positions than your actual account balance would otherwise allow. It’s a tool that can multiply the value of your capital, giving you the potential to make more money from market movements without needing to invest large sums of your own money. Think of leverage as “financial assistance.” With leverage, even a small amount of capital can control a larger position in the market. This can lead to amplified profits if the trade goes your way. However, it’s a double-edged sword; leverage can also lead to amplified losses if the trade moves against you. Example of Trading with Leverage Suppose you have €100 in your trading account and your broker offers a leverage of 1:5. This means you can control a position worth €500 with your €100 investment. If the market moves in your favor, your profits will be calculated based on the €500 position, not just the €100 you originally invested. However, if the market moves against you, your losses will also be based on the larger amount. What is Margin in Trading? Margin is the amount of money you must set aside as collateral to open a leveraged trade. When you use leverage, the broker requires a deposit to cover potential losses—this is called margin. Margin essentially acts as a security deposit, ensuring that you can cover losses if the trade doesn’t go as planned. Margin is usually expressed as a percentage of the total trade size. For example, if a broker requires a 5% margin to open a position, and you want to open a €1,000 trade, you would need to deposit €50 as margin. How Does Margin Work? Margin works together with leverage. The margin required depends on the leverage ratio offered by the broker. For instance, with a 1:10 leverage, you’d only need a 10% margin to open a position, while a 1:20 leverage would require a 5% margin. If the market moves against your position significantly, your margin level can drop. If it falls too low, the broker may issue a **margin call**, requesting additional funds to maintain the trade. If you don’t add funds, the broker might close your position to prevent further losses, which could lead to a loss of the initial margin amount. How Does Leveraged Trading Work? Leveraged trading involves borrowing capital from the broker to increase the size of your trades. This allows you to open larger positions and potentially gain higher profits from favorable market movements. Here’s a simplified process of how it works: 1. Deposit Margin: You set aside a portion of your own funds (margin) as a security deposit. 2. Leverage Ratio Applied: The broker provides you with additional capital based on the leverage ratio, increasing your trading power. 3. Open Larger Positions: You can now open larger trades than you could with just your capital. 4. Profit or Loss Magnified: Any profit or loss from the trade is amplified, as it’s based on the larger position rather than just your initial capital. While leverage doesn’t change the direction of your trades, it affects how much you gain or lose on each trade. That’s why it’s essential to understand both the potential for profit amplification and the risk amplification that leverage brings. The Benefits and Risks of Using Leverage Benefits of Leverage - Profit Amplification: With leverage, you can control larger trades, which means any favorable movement in the market can lead to greater profits. - Capital Efficiency: Leverage allows you to gain exposure to the markets without needing to invest a large amount of your own money upfront. - Flexibility in Trading: Leveraged trading gives traders more flexibility to diversify their positions and take advantage of multiple opportunities in the market. Risks of Leverage - Risk Amplification: Just as leverage can amplify profits, it also amplifies losses. If a trade moves against you, your losses can be substantial, even exceeding your initial investment. - Margin Calls: If the market moves significantly against your leveraged position, you may face a margin call, requiring you to add more funds to your account to keep the position open. - Rapid Account Depletion: High leverage means that small market moves can have a big impact on your account. Without careful management, you could deplete your account balance quickly. Important Considerations for Leveraged Trading 1. Understand the Leverage Ratio: Different brokers offer various leverage ratios, such as 1:5, 1:10, or even 1:100. Choose a leverage ratio that aligns with your risk tolerance. Higher leverage ratios mean higher potential profits but also higher potential losses. 2. Know Your Margin Requirements: Always be aware of the margin requirements for your trades. Brokers may close your positions if your margin level drops too low, so it’s essential to monitor your margin balance regularly. 3. Risk Management is Key: Use risk management strategies like stop-loss orders to limit potential losses on each trade. Don’t risk more than a small percentage of your account balance on any single trade. 4. Avoid Overleveraging: One of the biggest mistakes new traders make is using too much leverage. Start with a lower leverage ratio until you’re more comfortable with the risks involved in leveraged trading. 5. Only Use Leverage if You Understand It: Leveraged trading is suitable primarily for experienced investors who understand the market and the risks involved. If you’re new to trading, practice with a demo account to learn how leverage works before applying it in a live account. Final Considerations Leverage and margin are powerful tools in trading that can amplify profits, but they come with considerable risk. Using leverage wisely and understanding margin requirements are essential to avoid unnecessary losses and protect your account. While the prospect of profit amplification is attractive, traders should always remember that leveraged trading is a double-edged sword—it can lead to significant gains, but it can also result in rapid account depletion if not managed carefully. To summarize: - Leverage allows you to control larger trades with a small investment, multiplying both potential profits and potential losses. - Margin is the deposit required to open a leveraged trade and acts as a security against potential losses. - Use leverage responsibly and only after understanding the risks involved. Leverage can be a valuable tool in trading if used wisely, so make sure to educate yourself, practice with a demo account, and always approach leveraged trading with caution.
FX:XAUUSDEducation
by pow_removetheguesswork
Nvidia [NVDA] Top is in!! [S #1]---------------------------------------------------------------------------------------------- **First off, I have not posted in a while but the good news is I plan to become active and post consistently! I will be providing high quality signals, and only signals and analysis that I personally find worth showing. Any smaller less likely to succeed trades I will be avoiding. This will be a new series of content, I will label posts depending on category: = Signal (Expect clear and direct post, I will not be showing or explaining much of the TA) = Educative Post (I will be showing my Technical Analysis (TA) and teaching how it works) Since this is a new series of posts, I will label this post as the first signal (S #1) ---------------------------------------------------------------------------------------------- ***ALL ANALYSIS, SIGNALS, AND ANY CONTENT IS FOR EDUCATIONAL PURPOSES ONLY AND ARE NOT MEANT TO BE PROFITED OFF.*** ---------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------- Current Price which is $140,25 at market close, and $140.30 during the pre market. It is already starting to dip a bit during the pre market! This Signal is based from bearish divergences, price action, miscellaneous bear flags, and my special indicator. $135.24 $127.87 $122.71 Tight Stop loss: $142.52 Good Stop loss: $144.50 Loose Stop loss: $146.20 ---------------------------------------------------------------------------------------------- ***ALL ANALYSIS, SIGNALS, AND ANY CONTENT IS FOR EDUCATIONAL PURPOSES ONLY AND ARE NOT MEANT TO BE PROFITED OFF.*** ----------------------------------------------------------------------------------------------
NASDAQ:NVDAShort
by MarketAnalyzerFX
13
[EDU-Bite Sized Mini Series]Margin? Lots? Spread? What are they?Hello fellow traders , my regular and new friends! Welcome and thanks for dropping by my post. Today we are going to cover terms such as Margin, Lot size, Spread and What are they. Forex trading is a dynamic and potentially lucrative endeavor, but it comes with its own set of terminology and jargon that can be intimidating for beginners. Understanding these terms is crucial for aspiring traders to navigate the forex market effectively and make informed decisions. Margin One of the fundamental concepts in forex trading is margin, which refers to the amount of money required to open and maintain a trading position. Margin allows traders to control larger positions with a relatively small amount of capital, amplifying both potential profits and losses. It's important for traders to understand margin requirements and manage their leverage carefully to avoid excessive risk. Lot Size Another key concept is lots, which represent the size of a trading position in forex. Standard lots typically consist of 100,000 units of the base currency, while mini lots and micro lots represent 10,000 and 1,000 units, respectively. Lot size determines the potential profit or loss of a trade, with larger lots leading to greater fluctuations in account equity. If you are more comfortable with smaller lot size, you can even go on to nano lots in 100 unit of currency. Spread Spread is another term commonly used in forex trading, referring to the difference between the bid and ask prices of a currency pair. The bid price is the price at which traders can sell a currency pair, while the ask price is the price at which they can buy it. The spread represents the cost of executing a trade and can vary depending on market conditions and liquidity. There are different types of spreads encountered in forex trading, including fixed spreads and variable spreads. Fixed spreads remain constant regardless of market conditions, providing traders with certainty about trading costs. On the other hand, variable spreads fluctuate in response to market volatility, widening during times of high activity and narrowing during periods of low activity. Understanding these trading terms and jargon is essential for beginners to develop a solid foundation in forex trading. By mastering concepts such as margin, lots, spread, and different types of spreads, aspiring traders can make more informed decisions and effectively manage their risk in the dynamic and fast-paced world of forex. Do check out my recorded video (in trading ideas) for the week to have more explanation in place. Do Like and Boost if you have learnt something and enjoyed the content, thank you! -- Get the right tools and an experienced Guide, you WILL navigate your way out of this "Dangerous Jungle"! -- ********************************************************************* Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. *********************************************************************
Education
by Shadowing_The_Big_Boys
🟩 Margin Debt with brokers points upWhen we look at the first chart the Margin Debt with brokers (aka how much the brokers are deploying margin) - we see a positive relationship with the times when brokers are on margin (aka buying a lot) and the market going up. When we analyse the Rate of Change of this stat for the last 15months we can see that currently we are getting to a state of bearishness close to the 2008 and 2002 periods. This of course is a contrarian indicator and could point to a move higher. This is a long term assessment, but it is a good point to include in your analysis. However remember we NEVER have confirmed of the NET NEW HIGHS - hence this market has still not confirmed Bull Status, at best we have Bull-transition. So be very cautious of the market.
FRED:BOGZ1FL663067003QLong
by TintinTrading
✴️ EOS Activates Long-Term Important Support (10X Bullish)This is one of the greatest charts around... Corrections are great. Bear markets are also great because they open up countless of opportunities for smart players. Imagine how hard it would be for us to buy at all-time high prices. You know how hard it is to be inspired to buy when the action is already on-going or at the top? We have two important support levels/lows mapped on this chart with a light blue spaces and dark blue dashed lines. 

The June 2022 low and November 2022 low. When the June 2022 low was activated a 137% bullish wave followed. When the November 2022 low was activated a 69% bullish wave followed. We trade the "big" altcoins with leverage because they don't move as much as the smaller altcoins, so you need leverage to maximize profits. Leverage/margin will also increase risk but once you have experience this is nothing, just part of the game. Once you learn and accept that losing as just as normal and common as winning, you can apply your strategy and enjoy the results that you get. EOSUSDT just activated the June 2022 low and is already bouncing with force. We are active with 10X. Some people are crazy and use 15X, 20X and so on. Others are more conservative and use 8X, 7X, 3X and below... That's great, whatever works for you. Spot trading is also great. I always tell my people to trade spot for 1-2 years first and only after you've been doing spot successfully for a year or two move up and play the more complex game. If you can't double $100 USD, you won't be able to double $1,000 USD. If you can't make money with $1,000 USD, you won't be able to make money with $10,000 USD. Start small and grow... If you have your emotion under control, live a healthy life then you can do whatever you want and this game cannot affect you. But if you are in need, if you need "money fast" or to "get rich quick" then run! The market will take everything from you and then some more. The quicker/faster you think you need to win, the more time you need to take to learn. The more detached you are from the whole situation, the more risk that you can take. It is all a psychological game. Yes, buying the right pair at the right time is important but without the right mindset, you will sell wrong and do something to mess it up, but if you are sharp and healthy, you can even make mistake, accept them, learn from those mistakes and move on. Take responsibility for your actions and never blame anyone. If your broker/exchange plays dirty, withdraw a portion of your capital, diversify and just be smart. It is still early... This is just the beginning, wait until you see/experience 2025 and 2024. It will be great! I will be here for you, reading the charts and I hope to count with your continued support. It is always my pleasure to write for you. Thank you my friend. Thank you for reading. See you or hear you, feel you on the next one. Namaste.
Long
by AlanSantana
5
Gbp\Usd. BuyHello everybody! Let’s consider on a weekly ranges, the price impulsively returned to the flat from below (Flat borders are 1.20300-1.24000) have already retested the lower inner border of this flat. Margin analysis is long. Going down to the hour timeframe, you can see that the price was also in a flat for quite a long time (1.19400-1.21800) yesterday the pound went up from this flat. On the retest of the border, there is a serious supply-demand level (1.22050-1.21300), the Dpoc of the entire uptrend is right there, and the most traded levels. Here, using a pattern and filter through volumes, I will look for entry points to buy, the range for searching is 1.21750-1.21900. Also from the range of 1.20500-1.20600 (i.e. a bit lower) I will look form the entry points to buy, using the same tools- volumes and a pattern.
Long
by FrolovaZina
1:30 or 1:500 Leverage? How to Decide? As a trader, choosing the right leverage level can have a significant impact on your trading results. Two of the most common leverage options are 1:30 and 1:500. But how do you decide which one is right for you? To understand the difference between 1:30 and 1:500 leverage, let's take the example of trading 1 lot of EUR/USD. With 1:30 leverage, a trader would require a margin of $3,333.33 (1/30th of the position size), while with 1:500 leverage, the required margin would be $200 (1/500th of the position size). While some argue that 1:30 leverage is a potentially safer option, others believe that 1:500 leverage should be considered the appropriate option for those who can only afford to deposit a small amount of money into their trading account. For instance, traders who have limited capital and are just starting may find it difficult to trade with 1:30 leverage as they would need a substantial amount of margin to open trades. In contrast, 1:500 leverage may allow them to take larger positions with a lower amount of capital. Ultimately, it is important to choose the leverage that suits your trading strategy and risk tolerance. Here are some key factors to consider when choosing your leverage level when trading CFDs: Your risk tolerance: Traders with a high-risk tolerance may choose higher leverage, while those with lower risk tolerance may prefer lower leverage. Your trading strategy: For example, a scalping strategy that aims to make small profits on many trades may require higher leverage, while a swing trading strategy that aims for larger gains on fewer trades may need lower leverage. Market volatility: Consider the market you want to trade, and how volatile it is before choosing your leverage level. Account size: The larger your account, the lower the leverage you may need to achieve your desired position size. Regulation: Ensure you understand the leverage restrictions imposed by your broker and regulatory authority before selecting your leverage level.
by BlackBull_Markets
How Leverage Really Works | Margin Trading Explained Leveraged trading allows even small retail traders to make money trading different financial markets. With a borrowed capital from your broker, you can empower your trading positions. The broker gives you a multiplier x10, x50, x100 (or other) referring to the number of times your trading positions are enhanced. Brokers offer leverage at a cost based on the amount of borrowed funds you’re using and they charge you per each day that you maintain a leveraged position open. For example, let's take EURUSD pair. Let's buy Euro against the Dollar with the hope that the exchange rate will rise. Buying that on spot with 1.195 ask price and selling that on 1.23 price we can make a profit by selling the same amount of EURUSD back to the broker. With x50 leverage, our return will be 50 times scaled. With the leverage, we can benefit even on small price fluctuations not having a huge margin. ❗️Remember that leverage will also multiply the potential downside risk in case if the trade does not play out. In case of a bearish continuation on EURUSD , the leveraged loss will be paid from our margin to the broker. For that reason, it is so important to set a stop loss and calculate the risks before the trading position is opened. Let me know, traders, what do you want to learn in the next educational post?
Education
by VasilyTrader
10
Don't Blow Your Account | Learn How to Avoid Margin Call Hey traders, In this educational article, I will share with you 5 simple tips that will help you not to blow your trading. 1️⃣Always Use Stop Loss. Let's start with the obvious - with the stop loss order. Never ever trade without that. Before you open your trade, plan in advance its placement, stick to it once the position becomes active and never remove it. 2️⃣ Manage Your Position Sizes I know that most of you are trading with a fixed lot. That is a bad habit. You should measure the lot size for each trading position you take. You should define in advance the risk percentage you are willing to lose per trade and calculate the lot sizes for your trades accordingly, then. 3️⃣Avoid Taking Too Many Positions Remember that in trading, quantity does not imply quality. The more trades you take, the harder it is to manage each position individually. I would suggest opening maximum 5 trades per day and holding no more than 8 trades simultaneously. 4️⃣ Avoid Trading Too Many Markets The wider is your watch list, the harder it is to focus on each individual element inside. Do not try to control as many markets as possible, instead, narrow your watch list and concentrate your attention on your favourite trading instruments. 5️⃣Remember About Volatility The more volatile is the market that you trade, the harder it is to trade it and the bigger stop losses you need to keep your positions safe. Remember, that the volatility is the double-edged sword. It can bring substantial profits, but it can also blow your entire account in a blink of an eye. Following these 5 simple rules, you will make your trading much safer. Study them and add them in your trading plan. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
✳️ ETHBTC 8X Lev. 150%+ PotentialWe are active on this one as well with 8X. This is the same as ETHBTC. We entered on the 6-Feb. in the following range: Buy-in: 0.06950 - 0.07170 Full numbers will be shared later down the road.

 Disclaimer: Do your own research before trading. Lev./margin is high-risk and for experienced traders only.

 If you can't handle a loss, then trading is not likely for you, as some trades we win, many trades we lose. We learn from our mistakes, grow and move on. We make sure not to repeat the same mistakes in the future. But if we do make the same mistake we take responsibility for our actions and make sure the next time we are prepared to take the action we are supposed to take. You can have a plan and everything, be determined yet the emotions can take control. A huge win can change your life... If you are not ready for your life to change, your body, your subconscious mind, might push you to make a mistake because deep down you can't take the win yet and thus another loss. It is a psychological game. That's why we mediate and study so hard... If you grow in your mind, if you grow your energy, if you grow your consciousness, your money easily grows too. 
Namaste.
ELong
by AlanSantana
1
Soybean Crush Processor Margin w CalcThe soybean crush spread calculates how much profit a soybean processing plant can generate by crushing a bushel of soybeans into soybean meal and oil. The profit margin is that profit number divided by the revenue which is the price of the meal and oil outputs. I prefer to look at profit margin as opposed to just profit as it adjusts for large market fluctuations over time and is more meaningful from a business and analysis perspective. I was not able to come up with any tradable theories based on this analysis. I added live cattle and lean hogs to try and figure out what’s going on with soybean meal reaching multi-year highs this week. It appears that move is correlated with live cattle reaching new highs. Soybean meal is rising while soybean oil is falling. Soybeans are pretty flat although slowly rising. I will continue to monitor this spread for clues about future soybean, soybean meal, and soybean oil movements. If anyone has any insights on crush spreads, please share. The calculation of the spread is shown below:
CBOT:ZMH2023
by Skipper86
5
What Every Trader Should Know About Margin Margin can be a powerful tool to leverage your investment returns or to finance purchases apart from your portfolio. Margin is an extension of credit from a brokerage firm using your own eligible securities as collateral. Most traders typically use margin as a means to purchase additional securities, but there are other uses too. Interest is charged on the borrowed funds for the period of time that the loan is outstanding. Benefits of a Margin Trading Account: Use the cash or securities in your account as leverage to increase your buying power. Get the lowest market margin loan interest rates of any broker. Diversify trading strategies with short selling, options and futures contracts, or currency trading. Borrow against a margin account at any time and repay the loan on your own schedule. Margin borrowing is only for experienced investors with high risk tolerance. You may lose more than your initial investment. Before trading on margin, understand the following risks: Trading losses may be greater than the value of the initial investment Leveraged investments create a greater potential risk of loss Additional costs from margin interest charges Potential margin calls or liquidation of securities Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
14
QA WHAT is a Margin Call? QA: What is a Margin Call? You don't want this. It's an automatic instruction to close out your trade/s when you have insufficient funds in your portfolio. This is a safety mechanism for both you and your broker. It's also where either your trading platform, your broker or an automatic message via email will tell you to either deposit more funds into your account, close your trades or will warn you that your positions will be automatically closed. *DO YOU HAVE ANY TRADING QUESTION? Comment below or LIKE this post if you found it helpful. I've been trading for the last 20 years and it's my hobby to help provide analyses and help traders get on the right foot. I'm happy to have a platform like TradingView to do it :) Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
What is margin trading & How does it work? Margin trading is when you pay only a certain percentage, or margin, of your investment cost, while borrowing the rest of the money you need from your broker. Margin trading allows you to profit from the price fluctuations of assets that otherwise you wouldn’t be able to afford. Note that trading on margin can improve gains, but increases the risk and size of any potential losses. But what is the margin in trading? There are two types of margins traders should be aware of. The money you need to open a position is your required margin. It’s defined by the amount of leverage you are using, which is represented in a leverage ratio. There are also limits on keeping a margin trade running, which is based on your overall maintenance margin – the amount that needs to be covered by equity (overall account value). Brokers require you to cover your margin by equity to mitigate risk. If you don’t have enough money to cover potential losses, you may be put on a margin call, where brokers would ask you to top up your account or close your loss-making trades. If your trading position continues to worsen you will face a margin closeout. Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
6
Here come the margin calls : es shortAnyone watching the markets recently has seen how hard it has been crashing. With any crash, there's associated margin calls which spur further selling. In the past four days, my NDO indicator has found volume to be statistically abnormal, which shows that either panic selling or margin calls are beginning to take place. , but the volume still hasn't reached high abnormality. This means margin calls may be a serious danger to financial markets because according to en.macromicro.me FINRA margin debt is currently at a ridiculous level of around 700 billion usd. If all these funds are forced out of the market, there will be inevitably be further drops as people unload. On the downside, thanks to rally over the previous month, there's an enormous gap to the nearest swing low at 3716, and if that level fails to hold, the market could go as low as the bottom of the trend channel, in a crash to below 3600
CME_MINI:ES1!Short
by spiritualhealer117
Margin callWhen there are not enough available funds in your account to meet margin requirements, the broker issues you a warning, which is called a Margin Call. Your broker automatically sends a margin call when your free margin reaches $0 and your margin level reaches 100%. From now on, it will be impossible to open new positions. Thanks to leverage, traders get leverage that allows them to open positions that are several times larger than the size of their trading account. This helps to earn much more, but losses are also growing. It is at such moments, when you hold too large a position and the market goes against you, that you can get a margin call. This will trigger the automatic closing of all stop-out positions if the market continues to move against you. An example of a margin call. You open a forex trading deposit of $4000 and use a leverage of 1:100. As we know, the lot size on forex is equal to 100,000 units of the base currency ($ 100,000). When using the leverage of 1:100, you must deposit $ 1000 of your money as collateral for each open transaction in the amount of one lot. After analyzing the EUR/USD currency pair, you decide that the price will rise. You open a long position for two standard lots at EUR/USD. This means that you are using $2,000 of your funds as collateral. At the same time, the free margin will also be $ 2000. The cost of one item when trading one lot of software will be equal to $ 10. This means that if the price drops by 200 points, the free margin will reach $ 0, the equity level will be equal to the margin used, and you get a margin call. How can margin calls be avoided? To avoid margin calls, you need to follow the rules of risk management. Before opening positions, you need to know where your stop loss will be and how much it will equal as a percentage of capital. The distance from your entry point to your stop loss should determine the size of your position and, accordingly, your risk level. Do not do the opposite: the size of your position should not determine the size of the stop loss. You may have heard that it is not worth risking more than 5% of the capital in one transaction. Trading according to this rule is, of course, better than trading without rules, but an experienced trader will still say that it is too dangerous to risk 5%. Using the 5% rule, you can lose 20% of your capital in just 4 trades, which is too much. The more money you lose, the more difficult it will be for you to return to the previous level of your trading capital. Serious drawdowns are also psychologically difficult for most novice traders. You may even start trading out of a desire to recoup and start opening even bigger positions to try to recoup your losses. But this will no longer be a trade, but a gambling game. Never risk more than 2% of your trading account in any transaction. If you are just starting to trade forex, 1% risk will be even more appropriate. After you become confident in yourself and your trading strategy, you can slightly increase the size of your position. In any case, 5% is too much for most trading strategies. Even the best traders can make 4 or 5 losing trades in a row. If you want to trade using large lots, you must have the appropriate amount of capital. This is the only safe way to trade for large amounts. The number of positions you open at the same time determines your risk at any given time. If you risk only 2% of your trading account in one trade, do not think that you can open 10 positions at once — this is a sure way to get a margin call. Even if you only open two positions, but you are trading correlated currencies, you are still risking 2% in one trade. An example of this could be a risk of 1% on a long EURUSD position and a simultaneous risk of 1% on a long GBPUSD position. If there is a sharp jump in the market due to the US dollar, you will receive a loss on two positions and lose 2%. Therefore, try not to open multiple positions on correlating currency pairs, or at least be aware of the possible risks. Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩‍💻
Education
by Lingrid
21
LBS1! and Lumber4.10.22 PA1! and Lumber : I was really surprised when my students sent me an email showing a huge margin requirement for Palladium. I was a little embarrassed to not realize how high the margin requirements were, so I made some excuses for something I missed, and I gave my perspective on how I would look at this and what it means from a practical point of view. There is a difference between high margin requirements versus realistic risk in your trading account. Personally, I will trade palladium when everything set up and ready to go. If you can't afford palladium because you don't meet the margin requirements, this is no big deal because there are other commodity accounts that require much less margin, and can make you very nice returns with appropriate risk. However this market in palladium is so important because of its clarity in terms of market dynamics, pattern behaviors, and its intrinsic volatility, you still want to follow this because you may very well find yourself trading markets like this when you are more consistently profitable in your trading and have accumulated more capital.
NYMEX:PA1!
by ScottBogatin