FXCM is hosting a free FX Boot Camp at the Sofitel Sydney Wentworth Hotel on Saturday, 27 July from 1 to 5 PM. Click here to reserve your seat and get background information on the sessions and speakers.
FXCM US has introduced a feature called Smart Margin designed to notify you in advance of margin calls, which can give you more time to take action to potentially avoid them. This replaces the old setup where your trades would immediately be liquidated the moment your account fell below the 2% margin level required by US regulations to open forex trades. How does the Smart Margin Watcher work? The Smart Margin Watcher is based on two important levels: Initial/Maintenance, and Liquidation Margin. If your account equity falls below this level you will receive a Margin Warning at which point you will no longer be able to place new trades. Initial/Maintenance Margin This is the amount that is required to open a new position. It is also the minimum amount required to maintain your open positions. Liquidation Margin If your account falls to the Liquidation Margin level, all of your open positions will be liquidated immediately even though you may be in the three day grace period offered by the Maintenance Margin Warning. How is margin represented in the Accounts window? [Equity] is the "floating" value of funds in the account, including profits and losses on open positions. [Usd Mr] is Used Margin, the Liquidation Margin Level. [Usbl Mr] is Usable Margin. All positions are automatically liquidated when this reaches zero. [Usbl Mr %] is [Usbl MR]/[Equity] X 100%. As above, all positions are automatically liquidated when this reaches zero. [Usd Maint Mr] is the Usable Margin, the level when a Maintenance Margin Warning is issued. [Usbl Maint Mr] is Usable Maintenance Margin. This is the margin deposit available for opening new positions. A Maintenance Margin Warning is triggered when this reaches zero. [Usbl Maint Mr %] is [Usbl Maint Mr]/[Equity] X 100%. As above, a Maintenance Margin Warning is triggered when this reaches zero. [MC] The letters in the "MC" column denote the status of the margin call: "N" means there is sufficient Maintenance Margin. "W" means a Maintenance Margin Warning has been issued. "Y" means a Margin Call has been issued and positions have been liquidated due to insufficient margin. When will a Margin Warning or a Margin Call be issued? If your usable maintenance margin is exhausted, your account locks. Meaning, you can't open trades until you have usable maintenance margin again; you can only close trades. You'll be notified when this happens via the Trading Station. What are my options after I receive a Margin Warning? You can close a losing trade so that it stops draining margin from your account, giving you the opportunity to improve your margin level overtime from the returns on your profitable trades. You can deposit funds into your account; and if time is of the essence, debit card deposits are probably your best option since those deposits are credited the quickest. Finally, you can opt to do nothing. You might think that the market is going to turn around and that your losing trades are going to recover their losses. But do not forget, if your trades do not improve and your equity falls below the liquidation margin requirement or if your equity simply remains below the maintenance margin requirement for three days or more, a margin call will occur. How do I enable Smart Margin on my account? Smart Margin is enabled by default on new FXCM US accounts. Accounts opened prior to June 14, 2013 may enable the Smart Margin feature by logging into MYFXCM.com and selecting "Change-Margin Request". Similarly, you can disable the feature via MyFXCM.com if you prefer the old setup. Smart Margin Watcher is only available on FXCM US Trading Station accounts at this time. No matter what you do, Smart Margin gives you more options, and usually more time, to manage your losing trades. You can visit the FXCM US website for more information on Smart Margin including specific examples.
I wanted to follow up my post from last week about Smart Margin with a specific example of how it works. To recap, Smart Margin provides FXCM US clients with more flexibility in meeting the 2% margin required on forex trades by CFTC regulations. Under the old setup, trades were liquidated once an account fell below the 2% margin requirement, but now with Smart Margin, if your account falls below the 2% initial margin requirement, your trades will not immediately be liquidated. Instead, you will have 3 days to bring your account back above the 2% initial margin requirement. Your trades would only be liquidated in the interim, if your account fell even further to drop below the 1% liquidation margin level. 1. For example, let's suppose the following: Your account equity is $2,000.00. You place a long 10K EUR/USD position, requiring $300.00 in initial margin. Note, up-to-date rates can be found in the MMR column of the Simple Dealing Rates Window. Your liquidation margin (Usd Mr) is set at $150.00. 2. If your account equity falls to $500, that leaves you with $200.00 in Usable Maintenance Margin. While that's not enough to open another 10K EUR/USD position (since that would require at least $300 in Usable Maintenance Margin), you still have enough Usable Maintenance Margin to open a smaller position if you wanted. 3. If your account equity falls to $300, your Usable Maintenance Margin will fall to 0, and you will receive a Margin Warning. When a Margin Warning is initiated you will see a "W" in the MC column on the trading station and you will not be able to place any additional trades. Once you receive a Margin Warning, you will have approximately three days after 17:00 on the day of the Warning to bring your equity back above your Used Maintenance Margin Requirement of USD 300.00 (also thought of as bringing your Usable Maintenance Margin back above 0). Keep in mind that if at any time your Usable Maintenance Margin falls to 0 again, you will receive another Maintenance Margin Warning and the process will begin again.
SUI30 will be closed for trading on Thursday, August 1st for Swiss National Day. All other CFDs and forex will trade as normal.
Jason, Is there any chance that FXCM will support the cTrader platform in the near future? www.spotware.com. When I last talked to my active trader rep, he wasn't aware of the platform. I think that the first to get it in place in the US will get a landslide of new business. Thanks in advance! bp2012
Hi BP, While there aren't plans to offer this platform in the near future, FXCM is always open to expanding our offerings based on client demand. Thanks for your feedback. Is there some particular feature of this platform that interests you which you couldn't find in our current platforms such as Trading Station, Mirror Trader, MT4 and NinjaTrader? Thanks, Jason
Hi Jason, I'm sorry to hear that cTrader is not on the roadmap. However, I can understand it as FXCM already provides a number of platform options and each platform has significant maintenance and operational costs. As far as the features that are attractive to me, I like that it provides MetaTrader like charting, with NinjaTrader like C# indicators. It also doesn't typically cost the trader $1000 like NinjaTrader (I know that FXCM subsidizes the NT fee at sufficient volumes). But most of all, it is designed to guarantee NDD trading. Getting MT4 to work in an NDD arena is forcing the software to work in a way in which it wasn't really designed. Currently I trade with MetaTrader, but would jump ship in a heartbeat to cTrader. I have nothing against NinjaTrader, but really it is bolt-on, front-end software that comes with an up front cost. I'm not interested in spending 2k for the multi-broker license. Not because of the cost, but because the value to me doesn't justify the expense. Having a fully integrated cTrader platform designed from the foundation (front-end and back-end) to operate in the NDD/STP mode is more appealing to me. I guess we'll see how it all plays out in the upcoming months. As cTrader picks up steam in the non-US space, it will be interesting to see which US broker makes it available first. Thanks for the quick response! -bp
Hi BP, Thanks for providing these details on why you're interested in cTrader. I've shared your feedback with our management team. I'll post an update here should we offer this platform in the future. Jason
ITA40 will be closed for trading on Thursday, August 15th for Assumption Day. Titian's Assunta All other CFDs and forex will trade as normal.