The Trading Coach Podcast 1165 - The Most Feared Words In Trading - MARGIN CALL EXPLAINED
4 snips
May 22, 2025 Discover the two words every trader dreads: 'MARGIN CALL.' Learn how these calls act as safety nets during significant losses. The discussion dives into effective risk management strategies and the importance of building a resilient trading portfolio. Personal anecdotes reveal the impact of unexpected losses and the critical nature of understanding trading risks. Join for insights on adjusting your risk levels based on trading frequency, ensuring you're better prepared in the market.
AI Snips
Chapters
Transcript
Episode notes
Understand and Avoid Margin Call
- Margin call means your broker demands more funds or automatically closes trades when your losses hit a critical level.
- Avoid margin call by using stop losses and managing risk to not use up all your available margin.
Akil's Margin Call Experience
- Akil Stokes learned about margin call the hard way with reckless trading and many open trades without stops.
- He lost money when his broker automatically closed trades after margin was exhausted during a big market event.
Frequency Affects Risk Per Trade
- Trading frequency affects risk exposure: more trades mean higher total risk at once.
- Lower frequency traders can afford to risk more per trade as they hold fewer simultaneous positions.