What is a margin call

What is a margin call. Today we will learn What is a margin call?
A margin call happens when a trading account no longer has enough money to support the open trades. This happens when there are too many floating losses.
Let's try to understand it a little bit better. When a trader gets the opportunity to leverage his funds, he uses a loan he receives from the brokerage, called a margin. By utilizing margin, traders are increasing their purchasing power so that they can own more lots without fully paying for it. In SmartTradeFX for example, a trader can leverage his funds up to 1:200, meaning that a trader who opened an account with the sum of $10,000 can open new positions up to the amount of $2,000,000!
Using high leverage exposes you to high risks and so margin calls are like a safety feature embedded into your account that prevents you from losing more money than you have. Margin calls happen when a trader's equity reaches dangerous lows, in order to protect them from entering a negative balance.
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