Margin Call.

Thus, trading on the stock exchange almost always occurs using leverage; there is a possibility of losing not only the trader’s funds, but also the loan provided by the broker.

To prevent this, dealing centers use their own stop orders, which insure them against losses. One of these orders is Margin Call. Margin Call is a special level of unprofitability of a transaction, upon reaching which the broker can decide to forcefully close all open orders early.

This order informs the broker that the financial result of a losing trade or all open positions in the trader’s trading terminal is approaching a critical point.

After this, a representative of the brokerage company decides to terminate trading early or continues to monitor it, depending on the situation on the Forex market. Margin Call plays the role of a warning bell about danger, but even if a decision was not made to close the order, credit money still remains reliably protected by the stop out level, which is mandatory.

The standard margin call size usually ranges from 15 to 40 percent; one should not think that the smallest size of this level is more preferable when trading on margin. In practice, everything can turn out the other way around and early closure of a losing trade by Forex dealing centers sometimes allows you to save at least part of the trader’s funds.