Risk warning: Trading in CFDs and generally leveraged products can involve losses that exceed the initial investment
Unique Leverage Up to 1:1000
Flexible leverage between 1:1 – 1:1000
Negative balance protection
Real-time risk exposure monitoring
No changes in margin overnight or at weekends
Flexible Leverage from 1:1 up to 1:1000
At ClubFX clients have the flexibility to trade by using the same margin requirements and leverage from 1:1 to 1:1000
“Leverage” is having the ability to control a large amount of money using none or very little of your own money and borrowing the rest.
For example, to control a $100,000 position, broker will set aside $1,000 from your account. Your leverage, which is expressed in ratios, is now 100:1.
You’re now controlling $100,000 with $1,000.
Let’s say the $100,000 investment rises in value to $101,000 or $1,000.
If you had to come up with the entire $100,000 capital yourself, your return would be 1% ($1,000 gain / $100,000 initial investment).
This is called 1:1 leverage.
But if you’re leveraged 100:1, the broker only had to put aside $1,000 of your money, so your return is 100% ($1,000 gain / $1,000 initial investment).
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Depending on the account type you open at ClubFX, you can choose the leverage on a scale from 1:1 to 1:1000:- Margin requirements do not change during the week, nor do they widen overnight or at weekends. Moreover, at ClubFX you have the option to request either the increase or the decrease of your chosen leverage.
Margin is the amount of money needed as a “good faith deposit” to open a position.
In forex, to control a $100,000 position, broker will set aside $1,000 from your account. Your leverage, which is expressed in ratios, is now 100:1. You’re now controlling $100,000 with $1,000 The $1,000 deposit is “margin” you had to give in order to use leverage. Margin is usually expressed as a percentage of the full amount of the position. Brokers will require 2%, 1%, .5% or .25% margin.
The amount of money that has been “locked up” to keep your current positions open. While this money is still yours, you can’t touch it until you close your current positions.
This is the money in your account that is available to open new positions.
You get this when the amount of money in your account cannot cover your possible loss. It happens when your equity falls below 50% of the margin needed to maintain your open positions. If a margin call occurs, we will attempt to notify you with a margin call warning you that you do not have sufficient equity to support open positions. You may receive a margin call from our dealers, advising you to deposit a sufficient amount in order to maintain your open positions. If it reaches to stop-out level, some or all open positions will be closed at the market price.
At ClubFX you can control your real-time risk exposure by monitoring your used and free margin.
MetaTrader, our trading platform, allows you to monitor and control risk exposure in real time. Based on each client’s margin requirement, the platform calculates both the funds needed to retain current open positions and the trading resources available for entering into new positions or for adding to existing open positions.
When your equity gets to 20% of margin (i.e. equity needed to sustain the position), the trader will get an advance notice to take steps to prevent stop out. If nothing is done and equity drops to stop out level, all positions are closed. At ClubFX, all trading account types the stop-out level is 20%.
STEPS TAKEN TO PREVENT STOP OUT
- Do not open many orders at once. More orders means equity is used up to sustain a trade, leaving less equity as free margin to prevent margin calls.
- Use stop losses to control losses before they get out of hand.
- If a trade is hopelessly unprofitable, by all means close it. Better to close it while you still have money in your account than for the broker to do it for you and leave your account with nothing.
- Use hedging techniques. Many traders know nothing about hedging. You cannot survive long without using a technique that professionals use to cover their losses. Everyone will lose money at some point.
- If you have been issued an advance notice (i.e. margin call is higher than stop out level), immediately use an instant funding method such as a credit card to add money to your account.
Proper trade management is the best way to prevent stop outs.