Why do most brokers increase their margin, is it great for traders?
What is great for brokers is generally not for traders ... and vice versa!Originally Posted by ;
I totally agree with Ferru... one exception for that rule is true stp/ecn brokers. . They want their customers win. .Originally Posted by ;
Kindest Regards
They raise their margin when some large uncertain event is about to occur or there's high market volatility. For instance passed US elections, Brexit, etc..Originally Posted by ;
The motives for this is prevent liquidity shortage risks, as some trades made by their clients are hedged by brokers using various other counterparties. Excessive leverage and liquidity may produce situation where the losses out of your trade exceed your capital and the broker will begin owe its counterparty.
Lecture: do not trade using high leverage!