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MARGIN TRADING INVOLVES SIGNIFICANT RISK TO YOUR INVESTED CAPITAL

Margin Call and Stop Out

The biggest appeal of FX transactions is that they can operate hundreds of times as much money as they can by leveraging "leverage" on cash on hand (margin). Therefore, if the market moves in an unintended direction, a large loss will occur.
TTCM will notify you to inform you of the reduction in margin when the margin maintenance loss rate decreases below a certain percentage with the purpose of preventing loss spread of the principal as the loss on valuation of the margin balance expands. This is called "margin call".
In addition, when the amount of loss increases beyond a certain percentage, the target position (position) is automatically reverse traded (settlement). This is called "stop out".

AN EXAMPLE - When a loss occurs when holding a buying position

(*)"Margin maintenance ratio" indicates the ratio of net assets to the margin requirement margin. "Margin maintenance ratio (%)" = "effective margin" ÷ "necessary margin" × 100

Display margin call

When the margin maintenance rate falls below 80% and becomes subject to margin call, the profit and loss display column of MT4's terminal window is displayed in red.

Ross cut rule

When the margin maintenance rate drops to 50% or less, the loss cut (forced settlement) is executed in order from the position with the big evaluation loss among the open positions held by the customer. The margin maintenance rate can be confirmed within the transaction tab of the MT4 terminal window or within the cTrader open position tab.

AN EXAMPLE - Loss cut execution order when there are three unsettled openings

Open position Appointment date Valuation loss Order in which Rosscat is executed
Position A Xx hours xx minutes on Jun 1 -20,000 No. 2
Position B Xx hours xx minutes on Jun 4 -40,000 No. 1
Position C Xx hours xx minutes on Jun 8 -2,000 No. 3

 

* Depending on market conditions, the order of settlement contracts may be changed.

On the order of loss cuts due to lowering of liquidity

Since we enforce all transactions through "Liquidity Providers" (a network of financial institutions such as international investment banks and securities companies, which are commonly known as interbanks and are recognized worldwide) If liquidity declines markedly due to factors such as national holidays, economic trends, trading hours, etc., Rosscat may not be done in order.

HIGH RISK TRADING WARNING Trading of complex financial products, such as Stocks, Futures, Foreign Exchange (‘Forex’), Contracts for Difference (‘CFDs’), Indices, Options, or other financial derivatives, on ‘margin’ carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any of these markets you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading these markets, and seek advice from an independent financial advisor if you have any questions or doubts. Please carefully read our full ‘Risk Disclosures for Financial Instruments & Investment Services’.
ADVISORY WARNING:In case TTCM provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and/or prospects, opinions or recommendations of the blogs or other sources of information are not endorsed. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and it is advisable for the clients to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice.
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