To avoid a margin call and margin issues with FNmarkets, follow these strategies:
• Keep an eye on your margin level to ensure it stays above the required maintenance margin.
• Ensure your free margin is enough to cover potential losses.
• Set stop-loss orders to limit losses and protect your account equity.
• Use lower leverage to reduce the risk of a margin call.
• Spread your investments to mitigate risk from adverse market movements.
Understanding Margin Call and Calculations:
A margin call happens when your margin level falls below the required maintenance margin, usually 100%. It’s important to monitor your margin level to avoid this.
Margin Level Formula:
Margin Level = (Equity × 100) / Margin Used
Where:
Equity = The balance in your account (Balance ± PnL).
Margin Used = The amount of margin tied up in your open positions.
Example 1:
If your Equity is $5,000 and Margin Used is $1,000:
Margin Level = (5,000 × 100) / 1,000 = 500%
This is well above 100%, so no margin call is triggered.
However, if your Equity falls to $800 with the same Margin Used of $1,000:
Margin Level = (800 × 100) / 1,000 = 80%
Now, the margin level is below 100%, and a margin call is likely.