Don’t waste your time – keep track of how NFP affects the US dollar!

Data Collection Notice

We maintain a record of your data to run this website. By clicking the button, you agree to our Privacy Policy.

facebook logo with graphic

Join Us on Facebook

Stay on top of company updates, trading news, and so much more!

Thanks, I already follow your page!
forex book graphic

Beginner Forex Book

Your ultimate guide through the world of trading.

Get Forex Book

Check Your Inbox!

In our email, you will find the Forex 101 book. Just tap the button to get it!

FBS Mobile Personal Area

market's logo FREE - On the App Store

Get

Risk warning: ᏟᖴᎠs are complex instruments and come with a high risk of losing money rapidly due to leverage.

77.93% of retail investor accounts lose money when trading ᏟᖴᎠs with this provider.

You should consider whether you understand how ᏟᖴᎠs work and whether you can afford to take the high risk of losing your money.

LESSON 19. Margin, Leverage, Margin Call, Stop Out

How much money should you have on your account to keep trading? It’s logical that you will need money to maintain open positions…

How much money should you have on your account to keep trading? It’s logical that you will need money to maintain open positions.

The necessary sum is called margin. Forex brokers set margin requirements for clients.

Usually, margin equals to 1-2% of the position size. This notion is tightly linked to the term ‘leverage’.

When you trade on margin you use leverage: you are able to open positions on bigger sums than you have on your account.

These small movements can result in larger profits or larger losses when compared to an unleveraged position.

Let’s see how it works on the example. You have $1,000 on deposit and want to trade $10,000.

In this case, 1% margin equal to $100 will be set aside from your account. This is your used margin.

In your terminal “Trade” window you can see columns “Balance”, “Equity” and “Usable Margin”.

Your usable margin will be always equal to “Equity” less “Used Margin.” The leverage is 100:1, because you control $10,000 with just $100.

The remaining 99% is provided by the broker. The margin is needed for broker’s security in case the market goes against your position.

Brokers usually define margin call level.

For instance, if it is at 20%, you’ll get a margin call if your account equity drops to 20% of the margin (in our case 20% of $100 is $20).

In this case, you will receive a warning from your broker that you need to close your trade or deposit more money to meet the minimum margin requirement. 

In addition, beware that the broker will have to close your position at the current market price if the ratio of your deposit to your loss will reach so-called stop out level.

If stop out equals to 10%, this will happen if your equity drops to $10 (10% of the margin). Sometimes, margin call and stop out are the same,

and if your drops below 100% of the minimum requirement to trade the position is closed without any warnings.

Margin requirements, margin call and stop out levels are set by the broker for each account type and shown at its website.

As a trader, you should do your best to avoid hitting margin call and stop out levels.

Choose your payment system

Feel the Team Spirit

Callback

Please fill in the form below so we can contact you

Select the best time for us to call you. We give calls from Monday to Friday in suggested intervals. In case we couldn't get through, we will try again at the same time the next day. For getting real-time assistance, use FBS chat.

We provide only English-speaking callbacks. If you prefer any other languages, contact the support team.

We will call you at the time interval that you chose

Change number

Your request is accepted.

We will call you at the time interval that you chose

Next callback request for this phone number will be available in 00:30:00

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later