**WARNING!!! MARGINE CALL CAN LEAVE YOU OWING THE BROKER BIG TIME**
Does your broker honor margine calls through fast moving markets such as news releases or suprise bank conclusions which come out of nowhwere??? Otherwise your account is GONE.
I realized that as a result of CHF rate conclusion on 09/06/11
Let me explain...
I've a live mini account which I just put in $10.00 at a time in order to experience feelings instead of trading a demo minus the luxery of feelings.
I had a trade on the USDCHF with .01 lot size that equates to a little over 1 cent a pip and NO prevent loss, shame on me for not have been utilizing money management, BUT IT WOULD HAVE NOT HELPED. Neither could possess the brokers margine call of 100 percent
Here is why!!!
Price moved quickly over 700 pips GAPPING up many times. Because price was gapping up against me that the 100 percent margine call didn't close out my trade. I needed to manually close it at 61.5 percent margine leaving me owing the broker a bit over $1.30.
If I would have had a $10,000 regular account and created that trade using a conservative two lots I would have blown the account and owed the broker 700 pips X 2 lots = $6,800. A STOP LOSS WOULD HAVE NOT HELPED!!!
IBFX has a policy which says--
Buy stop, Sell stop and (Stop loss) orders don't guarantee an order will be filled at a specific price.
[All discontinue orders instruct the broker to close or open an order after a specified price is met or exceeded.]
The given price is called the stop price. Once the stop price is met or exceeded, the order becomes a market order. Market orders instruct the broker to fill the order at the upcoming available price. The execution price of a buy stop, sell stop or stop loss can vary from the stop price.
[This occurs most commonly during significant market moves or gaps.]
**Often these price gaps are the result of economic news releases. Keep in mind that in a market losses may happen and orders may not be filled placed. ***