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[QUOTE="Mario7, post: 72306, member: 15202"] [color=#FF0000]What is margin call and stop-out?[/color] Margin Call occurs when your equity reaches 50% of your used margin. The used margin is not deducted from your balance or equity, but it simply gets displayed in the Terminal window, where the main purpose of displaying the margin is for margin level calculation: Margin Level = ( Equity / Used Margin ) * 100%. The actual margin call is simply a notification (received by email on the Mt4 Terminal window) that your account is approaching dangerous levels. Stop out occurs when your equity drops to or below 20% of your used margin. At that point, the system will start closing your trades one by one, starting from the most losing one, in order to decrease the used margin, and by doing so, increase the margin level, attempting to push it above 20%. The calculation formula is this: (Equity/Margin) *100%. [color=#FF0000]How can I calculate the margin?[/color] Margin calculation formula for forex instruments is the following: [(Lots * contract size / leverage) * open price], where the result is at always in the primary currency of the symbol. For STANDARD accounts all forex instruments have a contract size of 100 000 units. For MICRO accounts all forex instruments have a contract size of 1 000 units. For instance, if the base currency for your trading account is USD, your leverage is 1:500 and you are trading 1 lot EURUSD at 1.40000, the margin will be calculated like this: (1 * 100 000/500) * open price = 200 Euros * 1.40000 = 280 USD Euro is the primary currency of the symbol EURUSD, and because your account is USD, the system automatically converts the 200 EUROS to 280 USD. You will now see in your trading account that your margin is 280 USD. [/QUOTE]
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