How to Avoid Margin Call in Forex Trading
What does margin call mean? Margin Call is a call from your forex broker requesting you to send more money in order to restore you from a position that has moved against you. to last long in the forex trade, you must learn and profitably apply the following tips for better trading result and profits. in short, how can you avoid a margin call?
1. Never trade without reviewing your trading goals.
For you not to enter a margin call, you must often review your trading goals. This will help you know when to stop and evaluate your trading activities.
2. Never allow maximum draw down on your account. A draw down occurs when you have a loss and your account balance drops. for example, a 50% draw down can be experienced when a grader had a loss of $500 out of $1000. This is a maximum draw down because, it will take 50% to fit back to the original $1000. This may be difficult to attain ,given the game of forex.
3. Never expose more than 20% of your forex account in trading.
You must only expose a maximum of 20% of your forex account in trading, to be able to last long in forex trade or market.
4. Never calculate forex trading profits and losses in dollars value. If you do you will only put yourself under pressure.
5. Never trade without a right mind-set.
no not enter the forex trade with a negative or wrong mind-set, such as fear or a get rich syndrome. Be positive and optimistic.
6. Never Over-trade
Always follow your goals in trading. When you reach your daily, weekly, or monthly goals and plans, you better stop.
7. Never confuse self with multiple currency trading pairs.
You must stick to one currency pair like EUR/USD. If you engage in trading many currency trading pairs at a time, it may cause you to ignore margin call warnings without your being aware of it.
8. Never trading without being sure of the main or the primary trend of the forex market. always find the primary trend and go with the trend when the market provides opportunity in that direction.
9. Never be unaware when a news event will be released.
10. Never borrow to trade.
This may hinder your decision making because of anxiety brought about by the lender.
11. Never use a slow speed internet service for trading.
This may hinder you in taking an important decision
12. Never trade the market with an off and on power source.
This will also hinder you at a time you are about to make an important decision.
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