Hello, I need a quick clarification: when trading with CFD the āmargin callā and āposition will closeā are set-up at 45% and 25% of the INITIAL account value or of something else?
E.g. if my INITIAL account value is Ā£10,000 and I bought X number of shares for a long position and the CURRENT account value is now Ā£3,500 (then going against my long position), does it mean that I already passed the āmargin callā of Ā£4,500 (45% of the INITIAL account value) and going closer to reach the āposition will closeā of Ā£2,500 (25% of the INITIAL account value)?
Then if I deposit extra Ā£10,000, and the CURRENT account value becomes Ā£13,500, are the āmargin callā and āposition will closeā still at 45% (Ā£4,500) and 25% (Ā£2,500) of the INITIAL account value of Ā£10,000 or did they change?
Thanks!!
So when using leverage you have say 1:10 for example (can be higher for some). If you are making money you will make a lot more money but if market goes in opposite direction it will eat your money far quicker. Once your account value hits 45% it will give a notification to say add funds to cover losses. Once it hits 25% it cashes in. You can loss a lot of money in this (speaking from personally experiencing it). Play with small amounts rather than using all the leverage with a higher value. That way youāll have a lesser risk associated with trades