Trading on margin can be a profitable investment strategy, but it's important that you take the time to understand the risks.
You should make sure you fully understand how your margin account works. Be sure to read the margin agreement and talk to your account representative if you have any questions.
The positions in your account could be partially or totally liquidated should the available margin in your account fall below a predetermined threshold.
You may not receive a margin call before your positions are liquidated.
You should monitor your margin balance on a regular basis and utilize stop-loss orders on every open position to limit downside risk. In fact, most traders place a stop-loss order at the same time of the entry order to limit risk.
You should make sure you fully understand how your margin account works. Be sure to read the margin agreement and talk to your account representative if you have any questions.
The positions in your account could be partially or totally liquidated should the available margin in your account fall below a predetermined threshold.
You may not receive a margin call before your positions are liquidated.
You should monitor your margin balance on a regular basis and utilize stop-loss orders on every open position to limit downside risk. In fact, most traders place a stop-loss order at the same time of the entry order to limit risk.
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