A margin call is a notice from a forex broker to an account holder that tells the account holder that he must put more money into the account or his position will be automatically closed out. A margin call is issued as the losses on a position approaches the total amount of margin deposited in the account.
Traders dread the margin call because it usually means the trade is turning against them – that is, that the currency pair is moving in the wrong direction. If a trader believes the trade is just temporarily going the wrong way, he can put in more money to keep the position open. Alternatively, the trader can close out the position and wait for the trend to turn the right direction before jumping back in.
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