The broker's warning (or automatic closeout) when your account loses too much and can no longer support your open trades.
A margin call is what happens when your losses eat your free margin and the broker says "you need to add money or we're closing your positions." Most modern forex brokers skip the warning and auto-liquidate — this is called a "stop out" and usually kicks in around 20-50% margin level.
Margin calls happen when traders are over-leveraged and don't have stop losses. One bad news spike, one missed FOMC, one weekend gap — and the account is toast. It's the single most common way new traders die.
Prevention is simple: small size, hard stop losses on every trade, and never put more than 1-2% of your account at risk on any single position. If you do that, margin calls become literally impossible.
The 2015 CHF unpeg sent thousands of retail accounts into negative balance. Brokers like Alpari UK went bankrupt overnight because so many traders had margin called at once.
Frequently asked about margin call
What is a margin call in trading?+
The broker's warning (or automatic closeout) when your account loses too much and can no longer support your open trades.
When will I see margin call used in real trading?+
Hopefully never. If you see "margin call" on your platform, you have minutes to either add funds or accept a closeout.
What is the most common mistake traders make with margin call?+
Adding money to defend a losing trade. This is called "averaging down" and it's how small losses become account-ending catastrophes. Never feed a losing position.
What do experienced traders know about margin call that beginners don't?+
If you're ever in a position where a margin call is even a possibility, your size is already too big. Close the trade, breathe, and size down to 1% risk next time.
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