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katzenhai2
Mar 20 2005, 05:41 PM
Hello.

I thought I understand the thing with the margin-call but now I read on the Oanda-Page this:

QUOTE
It is not a good idea to get a margin call. We suggest that you take proactive measures to prevent getting a margin call on your account. Overall, we recommend that you use a lower level of leverage. This makes a margin call less likely.

Why it is less likely that you get a margin call with a lower leverage?? wacko.gif
Because with a lower leverage you must pay higher margins and this makes a margin-call more likely...or not?!?
enigma
Mar 20 2005, 06:04 PM
QUOTE(katzenhai2 @ Mar 21 2005, 09:41 AM)
Hello.

I thought I understand the thing with the margin-call but now I read on the Oanda-Page this:
Why it is less likely that you get a margin call with a lower leverage?? wacko.gif
Because with a lower leverage you must pay higher margins and this makes a margin-call more likely...or not?!?
[right][snapback]191957[/snapback][/right]

it is true - lower leverage will result in a lower likelihood of a margin call for a given initial margin that you place with the brokers.

you are in effect, not using your entire cash balance to the fullest extent - rather, you have left yourself with a bigger reserve in the event the trade goes against you.

hope this helps.
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