Prevent margin call, know the costs

Margin call: When your trading account has no enough funds to support or sustain the current open losing positions, the account automatically shuts down  irrespective of how much balance you have.

How much do you spend per trade? I would not be surprised if there is a trader reading this post and cannot answer this simple question. Believe me when I say I was once that trader, so I understand, or shall I slang it “I feel you”. I am once again here sharing my not so good Forex trading experience. Learning to trade was a long rocky journey full of highs and very aching lows, not to mention costly. Those who really know me understand exactly what I mean by aching lows. Through it all  I learned valuable lessons that I was never taught or made aware of during my own Forex trading training. I use this blog as a platform to share with fellow traders and those who are just about to get started. 

This is just me trying to spread the word out there and to help you find that missing pieces of the puzzle in your own Forex trading journey, out of my personal experiences, mostly bad ones. Since this industry is highly bombarded with false and exaggerated information all over the net, it is really hard to find real people who speak openly and truthfully about this subject, I thought I should be that person and just tell it as it is. It seems like most Forex traders who speak about it have their own agendas (topic for another day), the purpose of this blog is NOT to give financial advice or whatsoever as I have already mentioned, it is personal, but if you can relate or find it relevant, then great!! You can keep on reading or following my posts.

“The key to winning is not inside of your computer, but inside of your head” ~ Elder Alexander.

Forex trading can deceptively appear as the easiest thing ever, but it is not. One has to be a realist and know his/her abilities and limitations when it comes to this business, it is not for the lazy minded, though it is mostly portrayed that way. One of the most painful things a trader  can experience is when the account is wiped out of the market or when you blow your own account out. Majority of Forex traders have had this unpleasant experience that does not only leave you shocked but extremely ashamed and embarrassed but guess what? they never share or tell, only beautiful stories are shared on social media, they even lie about having only  gains on their accounts. Every Forex trader even the most experienced ones at some point have a losing trade from time to time, we all do. It is never 100%, so do not believe this biggest lie Ok,  no business is 100% risk free anyway.

Biggest mistakes traders make

Having live trading account but still not having a clue of how much you spend per trade. That is one of the biggest mistakes that I made, knowing all the other details in my platform, like the balance (which is really not that important now that I am well-informed) neglecting what I now think is the most important part, your Margin and Free margin. Below are some of the questions you should ask yourself:

• Would you really run a business e.g. clothing company, but you simply do not know how much you spend for your fabrics and other staff in your business?
• Would you blindly bank your profits  and not even bother to check how much is left for you to buy more stock, my point is, do unto your live Forex account as you would do to your clothing shop or any other business.
• It doesn’t help knowing how to utilize features like  stop  and take profit  while you do not even know how much you are spending for your open trades. Do I make sense? (how I wish I could emphasize this in my own language), no matter how good your trading strategy is, if money is not well-managed, you are playing a losing game, I am deeply sorry to be the one telling you this, but I know now and  I also wish someone had told me earlier.

Where to start?

• Do as you would do in any other business (have a plan)
• Know how much you have (Equity)
• Pay attention to your margin and free margin and the best way that worked for me was knowing in terms of dollars. Knowing the jargon is good but not knowing what it means in terms of dollars is just as bad, I personally do this because I treat my Forex account as I would treat any other business.
• Know exactly  how much is left, that can still be used should  you  wish to open more positions, don’t just look at the balance because you might think the market is playing tricks on you when it put you on margin call and  kick you out while your balance looks OK, so do not let this to happen to you (if it hasn’t happened already), now I smile as I remember how I cried when it happened to me and i wasn’t even sure what was happening at the time.
• Another one that is overlooked by many traders is excellent internet connection, believe me, internet is your main tool in Forex trading, you cannot really do anything without good connection, market does not care if your internet is slow, if you have live trades, be sure you have good internet connection especially if you are scalping the market. I hope my mishap does help you in making  good decisions.

• Lastly, be very careful of this type of adverts that pops up everywhere in the net, they normally go  like: “I MADE $$$ (usually showing big amount like $3000) IN  30 MINUTES!! ” please before you jump in and do something drastic, take a deep breath and ask yourself this one question: How much was the person trading with? be alert and  smart, I have already gone through margin call and you don’t have to go through it, learn from my  mistakes, it is OK to learn from other people’s mistakes, thank you for stopping by.