What is Margin Call in Forex (based on the article)
Margin and leverage
In order to understand a forex margin call, it is essential to know about the interrelated concepts of margin and leverage. Margin and leverage are two sides of the same coin.Margin is the minimum amount of money required to place a leveraged trade, whileleverage provides traders with greater exposure to markets without having to fund the full amount of the trade. It’s important to remember trading with leverage involves risk and has the potential to produce large profits as well as large losses.
What happens when a margin call takes place?
When a margin call takes place, a trader is liquidated or closed out of their trades. The purpose is two-fold: the trader no longer has the money in their account to hold the losing positions and the broker is now on the line for their losses, which is equally bad for the broker. It is important to know that leverage trading brings with it, in certain scenarios, the possibility that a trader may owe the broker more than what has been deposited.
How to avoid margin call?
Leverage is often and fittingly referred to as a double-edged sword. The purpose of that statement is that the larger leverage a trader uses – relative to the amount deposited - the less usable margin a traderwill have to absorb any losses. The sword only cuts deeper if an over-leveraged trade goes against a trader as the losses can quickly deplete their account.When usable margin percentage hits zero, a trader will receive a margin call. This only gives further credence to the reason of using protective stopsto cut potential losses as short as possible.
USD/JPY Intra-Day Fundamentals: Japan Adjusted Merchandise Trade Balance and range price movement
2019-02-19 23:50 GMT | [JPY - Trade Balance]
if actual > forecast (or previous good for currency (for USD in our case)
[JPY - Trade Balance] = Difference in value between imported and exported goods during the reported month.
From rttnews article :
USD/JPY M5: range price movement by Japan Adjusted Merchandise Trade Balance news event
Chart was made on MT5 with BrainTrading system (MT5) from this thread (free to download) as well as the following indicators from CodeBase:
All about BrainTrading system for MT5:
AUD/USD Intra-Day Fundamentals: Australia Labour Price Index and range price movement
2019-02-20 00:30 GMT | [AUD - Wage Price Index]
if actual > forecast (or previous good for currency (for AUD in our case)
[AUD - Wage Price Index] = Change in the price businesses and the government pay for labor, excluding bonuses.
From official report :
AUD/USD: range price movement by Australia Labour Price Index news event
Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:
Same system for MT4:
GBP/USD - Cable Pulls Back After FOMC Minutes; 1.31 is the key (based on the article)
The chart was made on weekly timeframe with Ichimoku market condition setup (MT5) from this post (free to download for indicators and template) as well as the following indicators from CodeBase:
What is Slippage?
Slippage occurs when a trade order is filled at a price that is different to the requested price. This normally transpires during high periods of volatility as well as periods whereby orders cannot be matched at desired prices. Slippage in forex tends to be seen in a negative light, however this normal market occurrence can be a good thing for traders. When forex trading orders are sent out to be filled by a liquidity provider or bank, they are filled at the best available price whether the fill price is above or below the price requested.
Examples of forex slippage
Outcome #1 (no slippage)The order is submitted, and the best available buy price being offered is 1.3650 (exactly what we requested), the order is then filled at 1.3650.
Outcome #2 (positive slippage)The order is submitted, and the best available buy price being offered suddenly changes to 1.3640 (10 pips below our requested price), the order is then filled at this better price of 1.3640.Outcome #3 (negativeNEGATIVE slippage)The order is submitted, and the best available buy price being offered suddenly changes to 1.3660 (10 pips above our requested price), the order is then filled at this price of 1.3660.Anytime we are filled at a price different to the price requested on the deal ticket, it is called slippage.
How to avoid it?
So how does forex slippage occur, and why can’t our orders be filled at our requested price? It all goes back to the basics of what a true market consists of: buyers and sellers. For every buyer with a specific price and trade size, there must be an equal number of sellers at the same price and trade size. If there is ever an imbalance of buyers or sellers, this is what causes prices to move up or down.
Which currency pairs are the least prone to slippage?
Under normal market conditions, the more liquid currency pairs will be less prone to slippage like the EUR/USD and USD/JPY. Although, when markets are volatile, like before and during an important data release, even these liquid currency pairs can be prone to slippage. News and data events can increase volatility drastically.
Forum on trading, automated trading systems and testing trading strategies
copy trader slippage
Aleksey Pak, 2017.01.30 08:59
Slippage during copy trading
The Slippage tab displays average slippage when executing trade operations on the servers of various brokers.
The average slippage
is calculated based on statistics of trading signals execution at
different brokers. Statistics is gathered for all signals at the
provider's server. The difference between the order price placed by the
signal provider and the order execution price at the subscriber's server
is defined. The average value is calculated based on these data.
Number of slippage points is displayed according to the price accuracy (number of decimal places) at the signal provider's side.
Slippage can be caused by differences in quotes on the servers or trade execution delays. The lower the slippage, the higher the accuracy of the signal copying.
Intra-Day Fundamentals - EUR/USD and Dollar Index: Markit Germany Manufacturing Purchasing Managers Index (PMI)
2019-02-21 08:30 GMT | [EUR - German Flash Manufacturing PMI]
if actual > forecast (or previous good for currency (for EUR in our case)
[EUR - German Flash Manufacturing PMI] = Level of a diffusion index based on surveyed purchasing managers in the manufacturing industry.
EUR/USD: range price movement by Markit German PMI news events
Dollar Index (DXY): range price movement by Markit German PMI news events
USD/CAD Intra-Day Fundamentals: Canada Core Retail Sales and range price movement
2019-02-22 13:30 GMT | [CAD - Core Retail Sales]
if actual > forecast (or previous good for currency (for CAD in our case)
[CAD - Core Retail Sales] = Change in the total value of sales at the retail level, excluding automobiles.
USD/CAD M5: range price movement by Canada Core Retail Sales news event
NZD/USD Intra-Day Fundamentals: New Zealand Overseas Merchandise Trade and range price movement
2019-02-26 21:45 GMT | [NZD - Trade Balance]
if actual > forecast or previous good for currency (for NZD in our case)
[NZD - Trade Balance] = Difference in value between imported and exported goods during the reported month.
NZD/USD: range price movement by New Zealand Overseas Merchandise Trade news event
All about BrainTrading system for MT5:
Dow Jones Industrial Average - weekly breakout with the bullish reversal; 26K level is going to be broken to above (based on the article)
Same systems for MT4/MT5:
USD/JPY Intra-Day Fundamentals: Japan Jobless Rate and range price movement
2019-02-28 23:30 GMT | [JPY - Unemployment Rate]
if actual < forecast (or previous good for currency (for USD in our case)
[JPY - Unemployment Rate] = Percentage of the total work force that is unemployed and actively seeking employment during the previous month.
USD/JPY M5: range price movement by Japan Jobless Rate news event