Mindblown: a blog about philosophy.

Trading on margin is a way for traders with limited capital to make significant profits (or losses). If you fail to understand the concept of margin or not knowing what to do when faced with a margin call from your broker, you will definitely experience the shock of your trading account blow up. Here are five…

As you dive into the world of margin trading, it may feel like you have to learn an entirely new language to truly understand what’s going on. Just as with any specialized area, margin trading comes with its own terminology and jargon. Here’s a handy cheat sheet to the most common terms you may come…

What is the relationship between Margin and Leverage? You use margin to create leverage. Leverage is the increased “trading power” that is available when using a margin account. Leverage allows you to trade positions LARGER than the amount of money in your trading account. Leverage is expressed as a ratio. Leverage is the ratio between the amount of…

Each retail forex broker or CFD provider sets their own Margin Call Level and Stop Out Level. It’s crucial to know what your broker’s Margin Call and Stop Out Levels are! A lot of traders don’t even bother to find out what they are before opening their account, they just jump right into trading! These…

What happens if you open a trading account with just $100? Or €100? Or £100? Since margin trading allows you to open trades with just a small amount of money, it’s certainly possible to start trading forex with a $100 deposit. But should you? Let’s see what can happen if you do. In this trading scenario, your retail forex…

Different retail forex brokers and CFD providers have different margin call policies. Some only operate only with Margin Calls, while others define separate Margin Call and Stop Out Levels. In the previous lesson, we went through a trading scenario where you were using a broker that operated with a Margin Call only.In this lesson, we will go through a…

Let’s now take all the margin jargon you’ve learned from the previous lessons and apply them by looking at trading scenarios with different Margin Call and Stop Out Levels. Different retail forex brokers and CFD providers have different margin call policies. Some only operate only with Margin Calls, while others define separate Margin Call and Stop Out Levels.In…

The example above covered the scenario with you trading a single position. But what if you had MULTIPLE positions open? Hmmm. Sounds like you love gambling so here’s an example of how the liquidation process would work if you had two or more positions open. Each broker has its own specific liquidation process so be sure to…

What does “Stop Out Level” or “Stop Out” mean? The Stop Out Level is similar to the Margin Call Level, which was covered in the previous lesson, except that it’s much worse! In forex trading, a Stop Out Level is when your Margin Level falls to a specific percentage (%) level in which one or all of your…

What does “Margin Call Level” or “Margin Call” mean? In forex trading, the Margin Call Level is when the Margin Level has reached a specific level or threshold. When this threshold is reached, you are in danger of the POSSIBILITY of having some or all of your positions forcibly closed (or “liquidated“). The Margin Level is the “metric” and the “Margin…