Liquidation of deals
When you enter a position, you need to have sufficient funds to meet the losses that might occur during the course of time. In case, you dont have sufficient funds in your account and you continue to have losses, your deals will be liquidated.
Let's take a simple case. Suppose you have $500 in your account and you buy a UDS/CHF lot (10000 size). If you make profit, your margin balance will show an increment. But if you suffer losses, and your margin balance tends to drop below $0, all your deals will be liquidised.
This is how many of the traders get erased from the market in a split second. You have to be very careful while trading in forex. Constant monitoring is very necessary. You cannot place an order and leave it to execute on it's own.
How to prevent liquidation?
You can avoid liquidation and hence prevent yourself from suffering huge losses. You should place stop-orders with each order you place. Doing so will ensure that you do not suffer losses more than you have mentioned. You risk only the amount that you mention in the stop-order.
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