Always take extreme care to have enough equity and margin in your live account and maintain a healthy surplus of funds. Markets can move quickly, and as a trader, you must prepare for any extreme market movements in an open position.
Margin calls can be stressful and potentially costly for traders. By implementing proper risk management strategies, you can significantly reduce the likelihood of facing margin calls.
Here are the most effective practices to protect your trading account:
Understand Margin Requirements
Know your leverage: Higher leverage means higher risk of margin calls
Calculate required margin: Understand exactly how much margin is needed for each position
Monitor margin level: Keep track of your margin level percentage regularly
Implement Proper Position Sizing
Never overexpose your account: Limit your total exposure to a reasonable percentage of your equity
Consider correlation: Be cautious about opening multiple positions that could all move against you simultaneously
Scale in gradually: Consider building positions incrementally rather than all at once
Use Risk Management Tools
Stop Loss orders: Always set stop losses to limit potential losses
Take Profit orders: Lock in profits at predetermined levels
Trailing stops: Allow profits to run while protecting gains
Maintain Adequate Buffer
Keep additional funds: Maintain at least 50% more margin than required
Regular account monitoring: Check your margin level frequently, especially during volatile market conditions
Set personal margin call alerts: Create your own warning system before reaching broker margin call levels
Diversify Wisely
Spread risk across instruments: Avoid concentrating all your risk in one market
Consider correlation: Ensure your diversification actually reduces risk
Balance high and low volatility markets: Mix stable and volatile instruments
Develop a Margin Call Action Plan
Know how to add funds quickly: Have a process for rapid deposits
Understand partial close options: Know how to reduce position size effectively
Practice emergency responses: Be prepared to act decisively
For additional assistance with margin management or any other trading questions, please contact our support team through Live Chat in your Client Portal or email [email protected].