Margin Call: Why Leverage Closes Your Trade

Risk warning: Big lots on small accounts end in forced closes. This is education, not financial advice.

Margin is the deposit your broker locks for each open trade. When losses push your margin level too low, the broker closes your trades first. That forced close is a margin call.

Margin locks deposit

Every open trade locks part of your balance. That locked part is margin. It is not a fee. You get it back when you close the trade.

Bigger lots lock more margin. Higher leverage locks less per lot, but that is not safety. Less locked margin means the danger line sits closer.

Simplified demo: a $10 Cent account opens 0.01 lot. The broker locks about $1. The rest stays free as a cushion. See Leverage and Margin.

Level shows safety

Margin level is one number: equity divided by used margin, times 100. Above 100% means your cushion still covers the lock. Below 100% means losses ate the cushion.

Most brokers warn near 100% and force-close near 50%. Exact numbers differ per broker. Check your own broker rules page before you trade.

Big lots drain fast

Trade A risks 0.01 lot. A normal loss barely moves its level. Trade B risks 0.50 lot on the same $10 account.

One $0.27 loss against Trade B can drag its level near 44%. The broker then closes Trade B first. Same market and same direction — size decided the ending. See The 1% Rule and Position Sizing.

Stop-out closes first

The broker closes the biggest loser first. It keeps closing until the level recovers. Whatever is left stays yours.

This is not theft. The broker protects its own loan to you. Your job is to never meet that line.

Avoid the call

Run this checklist before every order. It takes one minute.

1. Small lot — start 0.01 on a $10 Cent account.
2. One trade — never stack three margin locks at once.
3. Stop always — set stop-loss before entry, never move it away.
4. Check level — glance at margin level in MT5 before each new order.

New to the app? See How to Install MT5.

Next steps

1. Learn the double-edged tool — Leverage and Margin.
2. Size every lot in dollars — Lot Size Math.
3. Feel the call with fake money — Margin Defense.
4. Plan a first trade with 1% risk — Your First Trade Walkthrough.

Watch the cushion live on the Tools page — the margin calculator shows how much of your balance a lot locks up.

Bottom line: Margin locks a deposit per trade, and big lots drain the cushion fast. Risk 0.01 lot with a stop, or the broker closes you out.