Trading on margin can be a double-edged sword. While it allows traders to control larger positions with a smaller amount of capital, it also significantly increases risk. If you don’t manage your trades properly, you could experience a margin call, leading to forced liquidations and possibly losing most (or all) of your account balance.
Here are five essential strategies to avoid a margin call:
1️⃣ Know What a Margin Call Is (WTF is a Margin Call?)
🔹 A margin call occurs when your Margin Level falls below a certain threshold set by your broker (usually 100%).
🔹 This happens when your Equity (Balance + Floating P/L) is less than the required margin to keep your open positions.
🔹 Your broker will demand you deposit more money or close positions to free up margin.
💡 How to Avoid This:
✅ Learn margin trading concepts such as Equity, Free Margin, Used Margin, and Margin Level.
✅ Regularly monitor your Margin Level to ensure it doesn’t fall below the broker’s requirement.
✅ If you don’t understand margin, you are guaranteed to blow up your account.
2️⃣ Know the Margin Requirements Before You Trade
🔹 Each currency pair has different margin requirements. Some are more volatile and require a higher margin.
🔹 If you don’t monitor your margin usage, your pending orders might be filled unexpectedly, pushing your Margin Level too low and triggering a margin call.
🔹 Placing too many trades at once can drain your margin without realizing it.
💡 How to Avoid This:
✅ Check your broker’s margin requirements before placing any trades.
✅ Plan your trades so your total margin usage leaves room for volatility.
✅ Avoid overleveraging—just because you can trade big doesn’t mean you should.
3️⃣ Use Stop Losses and Trailing Stops
🔹 Not using stop losses is one of the biggest mistakes new traders make.
🔹 A stop loss order automatically closes your position at a predefined price to limit your losses.
🔹 Trailing stops allow your stop loss to move in the direction of your trade, locking in profits while limiting potential losses.
💡 How to Avoid This:
✅ ALWAYS use stop losses—never leave a trade unprotected.
✅ Use trailing stops to automatically protect profits.
✅ If a trade is moving against you, don’t hold on and hope—stick to your plan.
4️⃣ Scale Into Positions Instead of Going All In
🔹 Many traders open huge positions thinking they know where the market is going. If they’re wrong, they get margin called fast.
🔹 Scaling in means opening smaller positions first and then adding more if the trade goes in your favor.
🔹 This helps control risk and avoids excessive margin usage upfront.
💡 How to Avoid This:
✅ Start small, then increase position size as the trade moves in your favor.
✅ Move stop losses to break even as soon as possible.
✅ Never risk too much capital in a single trade.
5️⃣ Know WTH You’re Doing as a Trader
🔹 Many traders don’t know what they’re doing and jump into the market focused only on profits—ignoring risk.
🔹 Lack of education + high leverage = guaranteed account blowup.
🔹 The best traders prioritize risk management, not just making money.
💡 How to Avoid This:
✅ Focus on risk management first, profits second.
✅ Learn position sizing, risk/reward ratios, and trade planning.
✅ Trade with discipline—don’t gamble on the market.
📌 Conclusion: How to Avoid a Margin Call
🔥 Margin trading is powerful, but without risk management, it will destroy your account.
🚨 Pay attention to your margin usage, equity, and leverage at all times.
📉 Never trade without a stop loss.
⚠️ Use smart position sizing to protect your account.
If you manage risk properly, you will never have to experience a margin call.
