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Margintrading

Don't Blow Your Account | Learn How to Avoid Margin Call Hey traders, In this educational article, I will share with you 5 simple tips that will help you not to blow your trading. 1️⃣Always Use Stop Loss. Let's start with the obvious - with the stop loss order. Never ever trade without that. Before you open your trade, plan in advance its placement, stick to it once the position becomes active and never remove it. 2️⃣ Manage Your Position Sizes I know that most of you are trading with a fixed lot. That is a bad habit. You should measure the lot size for each trading position you take. You should define in advance the risk percentage you are willing to lose per trade and calculate the lot sizes for your trades accordingly, then. 3️⃣Avoid Taking Too Many Positions Remember that in trading, quantity does not imply quality. The more trades you take, the harder it is to manage each position individually. I would suggest opening maximum 5 trades per day and holding no more than 8 trades simultaneously. 4️⃣ Avoid Trading Too Many Markets The wider is your watch list, the harder it is to focus on each individual element inside. Do not try to control as many markets as possible, instead, narrow your watch list and concentrate your attention on your favourite trading instruments. 5️⃣Remember About Volatility The more volatile is the market that you trade, the harder it is to trade it and the bigger stop losses you need to keep your positions safe. Remember, that the volatility is the double-edged sword. It can bring substantial profits, but it can also blow your entire account in a blink of an eye. Following these 5 simple rules, you will make your trading much safer. Study them and add them in your trading plan. ❤️Please, support my work with like, thank you!❤️
OANDA:XAUUSDEducation
by VasilyTrader
11
What Every Trader Should Know About Margin Margin can be a powerful tool to leverage your investment returns or to finance purchases apart from your portfolio. Margin is an extension of credit from a brokerage firm using your own eligible securities as collateral. Most traders typically use margin as a means to purchase additional securities, but there are other uses too. Interest is charged on the borrowed funds for the period of time that the loan is outstanding. Benefits of a Margin Trading Account: Use the cash or securities in your account as leverage to increase your buying power. Get the lowest market margin loan interest rates of any broker. Diversify trading strategies with short selling, options and futures contracts, or currency trading. Borrow against a margin account at any time and repay the loan on your own schedule. Margin borrowing is only for experienced investors with high risk tolerance. You may lose more than your initial investment. Before trading on margin, understand the following risks: Trading losses may be greater than the value of the initial investment Leveraged investments create a greater potential risk of loss Additional costs from margin interest charges Potential margin calls or liquidation of securities Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
14
QA WHAT is a Margin Call? QA: What is a Margin Call? You don't want this. It's an automatic instruction to close out your trade/s when you have insufficient funds in your portfolio. This is a safety mechanism for both you and your broker. It's also where either your trading platform, your broker or an automatic message via email will tell you to either deposit more funds into your account, close your trades or will warn you that your positions will be automatically closed. *DO YOU HAVE ANY TRADING QUESTION? Comment below or LIKE this post if you found it helpful. I've been trading for the last 20 years and it's my hobby to help provide analyses and help traders get on the right foot. I'm happy to have a platform like TradingView to do it :) Trade well, live free. Timon MATI Trader
JSE:J200Education
by Timonrosso
What is margin trading & How does it work? Margin trading is when you pay only a certain percentage, or margin, of your investment cost, while borrowing the rest of the money you need from your broker. Margin trading allows you to profit from the price fluctuations of assets that otherwise you wouldn’t be able to afford. Note that trading on margin can improve gains, but increases the risk and size of any potential losses. But what is the margin in trading? There are two types of margins traders should be aware of. The money you need to open a position is your required margin. It’s defined by the amount of leverage you are using, which is represented in a leverage ratio. There are also limits on keeping a margin trade running, which is based on your overall maintenance margin – the amount that needs to be covered by equity (overall account value). Brokers require you to cover your margin by equity to mitigate risk. If you don’t have enough money to cover potential losses, you may be put on a margin call, where brokers would ask you to top up your account or close your loss-making trades. If your trading position continues to worsen you will face a margin closeout. Hey traders, let me know what subject do you want to dive in in the next post?
OANDA:XAUUSDEducation
by TopTradingSignals
6
When you should use leverage in your trades?When you should use leverage in your trades? I’m going to answer this question, but first, we have to mention two other questions to be answered. Q1: What is a reasonable trade? An order in which the entry point, stop loss, and take profit are already pre-defined based on a good return strategy or rules. Q2: What is money management? Money management is to determine the percentage of risk on the total balance in each order and to know what your position size will be and how much your potential loss will be. We need to do some calculations to answer the first question. Let’s suppose your account balance is $100 and the maximum risk on your balance for each trade is 5%. This means that on a reasonable trade, your loss will be $5 at most. Besides that, you have a good trading opportunity with an entry point at $10, stop loss at $9, and profit point at $12, i.e. 10% potential risk and 20% potential reward for the position. Since we cannot lose more than $5 of our balance, we need a position size where the potential loss will not exceed $5. Which we can calculate with this formula: (Max risk on balance / position risk * 100). Which would be $50 in our case.  This means that we are only allowed to include $50 out of $100 in this trade; this would be $5 after a 10% loss.  Everything is normal and we can afford it, so we will do the trade. Now, let’s increase the max risk on balance to 20%. It means our potential loss would be at most $20. By doing the same calculations considering the same reasonable trade with 10% risk, our position size will be $200 while we do not have more than $100, so where do we get $200 from?! Yep! Leverage would help you in this case. So benevolent, isn’t it?  In this case, your leverage would be 2 and you can open a $200 position, but don’t forget you increased your account risk from 5% to 20% already. Note that the risk will be applied to your real asset. If your balance is $100 and the leverage is 10, the exchange will give you about $1000 to buy or sell. While the 5% of $100 is $5, the 5% of $1000 would be $50, which is 50% of your real asset. So calculating the risk on leverage balance is practically meaningless! What if we had 10 orders simultaneously? It means $100 will be split between 10 orders. For ease of calculation, we consider every 10 trades to be the same as what we had above, while each trade would have 10% of $100. In these conditions, each trade would again have a $50 position, but leverage will be 5! Having said that, we can conclude that leverage alone is meaningless and finds meaning alongside reasonable trade opportunities and money management. In the above explanations, for the ease of calculation and context understanding, I used rand but not necessarily correct values. For example, a risk ratio of 5% on balance is a really high risk or in the example of 10 trades at once, it is wrong to consider your balance as $100 at the start of each trade. In the worst-case scenario, you should deduct the loss of the previous trade from your balance for the next trade. From the link below, you can access the tool I prepared to calculate the position details. bit.ly Feel free to give your constructive feedback.
Education
by bhnmzm
2
Spot Trading vs Margin Trading Pros and ConsSpot Trading is the most basic form of trading method and is the most suitable for beginners in trading. It's simply a BUY > HOLD > SELL mechanism. On the Other Hand Margin Trading is complicated and should only be done by experienced traders. There are various components to margin trading such as Maintenance margin, margin calls, leverage, and liquidation. Pros and cons of Spot Trading 👉Spot trading is easy to learn and understand and is a good starting point for beginners in Trading. 👉It's an easy process to manage risk in spot trading not taking all the complications of liquidation or margin calls. 👉You can hold an asset for a much longer time and in the case of cryptocurrency can also transfer to any cold wallet. 👉No Trading happens during downtrends. 👉The potentials gains are not very good on a smaller investment amount. Pros and cons of Margin Trading 👉Margin Trading needs some advanced knowledge of various things such as margin calls, liquidation, leverage, etc. Hence it's not recommended for new traders. 👉You can make profits on both uptrends(by going LONG) and downtrends(by going SHORT). 👉Gives an ability to trade much larger amounts with a relatively small initial investment by using leverage. 👉Margin Trading is risky, and if not done properly can blow your account in a very short time span. 👉Profits are higher when utilizing margin trading, and so are the losses. Every exchange has its own rules for margin trading, which need to be understood carefully before investing. Thanks for reading and what kind of trading technique do you use and why? Share in the comments below. For more similar educational ideas, scripts and trend analysis follow us. Happy Trading.
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Education
by Tuned_Official
22
Trading With MarginI’m Markus Heitkoetter and I’ve been an active trader for over 20 years. I often see people who start trading and expect their accounts to explode, based on promises and hype they see in ads and e-mails. They start trading and realize it doesn’t work this way. The purpose of these articles is to show you the trading strategies and tools that I personally use to trade my own account so that you can grow your own account systematically. Real money…real trades. Let’s talk about trading with margin. What is margin? Who should trade with it? Should YOU be trading with it? You see, when used correctly, margin can be your best friend, but when used incorrectly, it can be a disaster. Leverage is a double-edged sword, and it can work for you as well as against you. This is why I want to show you the responsible way to trade on margin. So let’s get. What IS Margin? So first off, what the heck is margin? Well, when opening a trading account, you can open a cash account or a margin account, but what is the difference between the two? With a cash account, if you put $10,000 into the cash account, it means that you have $10,000 in buying power, meaning that you can buy stocks and options for $10,000. Now, when you have a margin account, the difference is when you’re putting $10,000 in cash in there, the broker will actually lend you another $10,000. So in total, you’re getting $20,000 in buying power. How To Open A Margin Account This is how you open a margin account, with tastyworks because this is the broker that I personally use, & I have four active accounts with them. So when you go to tastyworks, it asks what kind of account do you want to open? Is it an individual account, an entity/trust, or a joint account? Then they will want to know what kind of account you want to open. Do you want to open a margin, cash, or retirement account? So with a cash and retirement account, this is where the broker does not lend you money. So whatever cash you have in there, this is what you have in buying power. However, when you use a margin account, you’re getting 2:1 buying power. Buying Power: Stock vs Options When it comes to buying power, there are two things that you need to know. First is there is buying power for options, and buying power for options is always non-leveraged. So if you put $10,000 in cash, even in a margin account, it means that you have $10,000 in buying power for options, and I’ll explain to you in a moment why that is. And then we also have buying power for stocks, and here this is where margin kicks in. So $10,000 in cash will give you $20,000 in buying power for buying stocks. There’s also something called portfolio margin, and we will talk about this in just a moment, but I first want to show you exactly what it means here to have the buying power for options and to have the buying power for stocks. How To Use Margin The Right Way So I want to give you here a very specific example for Apple AAPL , and we first want to look at what happens if you want to sell, while trading The Wheel. So let’s just say that you want to sell the 125 put for AAPL . What does that mean? It means that if you’re selling the put, you might be forced to buy AAPL at $125 a share, and for each put option that you’re selling, you would have to buy 100 shares of AAPL . So this means that you would have to bring $12,500 to the table per contract, right? Now here’s the deal. When you’re selling options, the broker is already giving you a discount. So let’s see how much the broker is charging us if we want to sell a 125 put for AAPL . So for AAPL I’m just choosing next week’s expiration because at this point the expiration and the price don’t matter right now, because all I want to show you is how much buying power is needed if I were to sell 1 put. So the buying power that will be reduced from your options is $2,202. So as you can see, if you are buying AAPL at 125, you would have to bring $12,500 to the table, but here the broker is only charging you $2,202. Now again, we want to assume a $10,000 account because this is what many people are starting with. So on a $10,000 account, theoretically, you could sell 4 of these options, and for this, if we are doing this, and edit our order to sell 4, we see that the broker will charge you $8,783. So on a $10,000 account, at first it seems that you have enough margin for this. Wrong! Don’t do that! So this is where we talk about the responsible way and the irresponsible way to do this. So when you do this, this would be irresponsible. So here is what I think you should do. Remember, on a $10,000 account, you’re actually getting $20,000 in buying power for buying stocks. So you have $20,000 for buying stocks, so if you are selling one option, and you would get assigned, then you would have to buy stocks for $12,500 and you still have $7,500 left, right? This is why you should only sell one option, even though your broker will only charge you $2,205 because if you’re assigned, you would have to bring $12,500 to the table. The good news is you have that because the broker gave you $20,000 in buying power. So this here is the right way to do this, and the right way means that you’re not over-leveraging yourself. How To Use Margin The Wrong Way So here’s what would have happened if you would have sold 4 options and got assigned. Well, in this case, you would have to bring to the table 4 times $12,500, so this is $50,000, but you only have $20,000 in buying power. So there’s a difference. So if you take the $50,000 minus the $20,000 that you have in buying power, you are $30,000 short, and these $30,000 become a so-called margin call, and these are the dreaded margin calls that you sometimes hear traders talk about. A margin call means that right now you have to wire the broker $30,000, which you probably don’t have, right? If you don’t do this, he will sell 300 of your shares. So you’re still technically fine if you have less than the $20,000. He probably sells a little bit less so because he wants to make sure that you are just overcoming this shortage. Portfolio Margin There's also portfolio margin. What the heck is the portfolio margin? Well, the portfolio margin is for bigger accounts, and when I say bigger accounts, it really depends on the broker. You see, some brokers request at least $100,000 in your account. Others request that you have at least $150,000 in your account, and even others request that you have $175,000 in your account. It really depends on your broker. Now, however, if you have the required minimum in the account, you can apply for portfolio margin. Why would someone be interested in doing this? Well, portfolio margin basically means, & again, it depends on the broker, that you are getting a 5:1 or a 6:1 leverage. It means that if you have let’s say $200,000 in cash in an account, it becomes a million dollars in buying power, or depending on the broker, it could even become $1,250,000 in buying power. So now you have a lot of buying power, and again, you have to use this responsibly. Just because the broker is giving it to you, you shouldn’t use all this. So the same principles for me personally, apply like if I were using a 2:1 margin account. I personally use this “excess buying power” when things go wrong when I need to save a trade that is in trouble. So this is when I have to fly a rescue mission. Summary Well, first of all, it is super important that you understand what margin is, what buying power is, and then that you also understand that your broker is only charging you a small amount when you are selling options. Don’t overleverage yourself, because when you do this you’re getting the dreaded margin call, and when you are getting the dreaded margin call you have to either wire money into the account, and this pretty much right away, the broker usually gives you 24 hours. Some brokers might be generous and give you 48 hours, but usually, it is within 24 hours. If you don’t wire the shortage to your broker, he will sell your shares until the margin requirement is met. So you lose full control and you don’t want to do this. Anyhow, I hope this has been helpful.
TVC:NDQEducation
by rockwelltrading
One hard truth about trading crypto: many 'clocks'Well, friends... Hello again! After turn of day excitement and disillusionment, here a simple but important example of how key is to keep more than one exchange in check for key levels: 4.272 projection for 'wave 1', down at low 8000's, was hit on many, if not all (most relevant) crypto exchanges, except... Bitstamp. Now, not anymore. It cost some folks the bad sensation of being trapped for who knows how long, or be point-blank stopped. Could they have avoided it? What do you think? So, trading crypto is a bit like having many clocks. You never know which one is right at any given moment. As such, the best you can do is, whenever you have a target, double-check it on multiple "clocks" / exchanges. Those that I watch more frequently, here on TradingView, are: BitMEX Bitstamp Bitfinex Binance Coinbase HitBTC (BTW, there was a second option to avoid this trap: as it usually happens in many trading situations, this latest rejection level is also related to 2 day TD Setup resistance line. Please check related idea for more information.) Now, changing topics, briefly: another noticeable event, also highlighted on charts, are "off-the-book" margin operations on Bitfinex, which frequently lead to higher volatility, as exemplified. Such event preceded latest run up too. To learn more about this topic, please check here . So, what you think now? Price going down -- a bit a least -- or no chance, the way is up? Cheers! PHInkTrade
BITFINEX:BTCUSDEducation
by PhinkTrade
It is ready for bullish trend?lots of people focus on every charts in every markets to find good solution. some of them analyze BTCUSD long or short charts to find out how capital flow. It is not clear chart. it is best chart to see how Tether accumulated in every Bull & Bear trend. On the image of BTCUSDLONG you can see several moments which trends is against real charts. because people had margins false & huge amounts of USD/USDT flow on specifics place. In two times ago, after accumulating capital, chart was ready to start UP trend. NOTICE: every charts have clear & dark meanings. Be careful on this new trend.
BITFINEX:BTCUSDEducation
by amin.izadi4
How to get the best out of FOMO_Buy_Sell_IndicatorConfirmation of FOMO Signals 1. Open position after Candle Close or new Candle Open 2. Make sure price is below Holy Trend Line (HTL) for SHORTing. 3. Trade with the trend (Downtrend). 4. Close/consolidation above HTL indicates possible trend reversal Result Total Profitable Trades in direction of the trend -> 7 Duration -> Less than 30 Days 5x Leverage 1. 73.9% 2. 105.95% 3. 88.45% 4. 25.55% 5. 35.4% 6. 44.6% 7. 80.65% Filter out better trades 1. Do not SHORT if HTL is green. 2. Do not LONG if HTL is red 3. Trade in direction of the trend.
BITFINEX:BTCUSDEducation
by vjsharma89
7
somewhat foolproof high leverage (>25x) trading plan exampleThe idea is simple. look for key moment in a chart where large consolidation is coming to a head. most recently we had this occur. multi month triangle coming to a head. bulls... thinking we would break out of the consolidating triangle and ignite a new bull run. 3 apparent higher lows on the daily. fundamentals getting stronger every day institutional investors AND governments acknowledging keen interest and excitement bears... weekly macd bear cross below 0 line below all major daily MAs just closed two consecutive weeks below 50 weekly MA this is just a sampling of technical indicators. we could add more to both sides. regardless, it doesn't matter which one happens. Here's how you win no matter what. as the consolidation approaches an apex, you get the opportunity to margin short and long at the same time . consider the following. You have $2k available for a trade. $1k for long and $1k for short. wait until consolidation get's tight. look for the spread between the lower highs and the higher lows to get below 4% Looking at the LIGHT green after multiple HL and LHs, this a is a GREAT long and short entry for 25x, 50x, 100x. These options are likely NOT the entire of the HL and LHs, which is really good for possibly NOT getting margin called on your losing trade. If you manage to get both long and short entered, wait a bit and let the triangle continue to form. stop loss BELOW our entry significantly. basically if you got an entry near the supporting triangle trend it may back test it, place stops below that. you might lose a significant portion of your trade. deal with it, this is margin trading. Now that the price has drifted from your entry, place stops at break even. as the triangle reaches it's apex...its going to pop eventually. One of your 50x positions will be in a sick position for major profit, and the other will have closed (hopefully for little/no loss) DARK green You're late to the game, but same theory applies. open high leverage longs/shorts on triangle bounce. riskier here because you are expecting the triangle to break soon. WHY is it somewhat? of course nothing is perfect. and we have seen once or twice the whales clear out shorts AND longs in one sick up/down. but this gives you a very good chance to have a live high margin trade. it just costs double then the advertised collateral.
BITFINEX:BTCUSDEducation
by whoisthelorax