The Euro / USD had a spike up yesterday.
Many folks received a call from Margin.
MARGIN CALL is a terrible thing to happen. Your ego is gone. It hurts. Worst, your money is gone. Why do spikes happen?
- An unexpected news / economic result triggering massive orders of the same type
- Markets opening and closing. Hence traders are getting into or out of their positions
- “Intervention” from big institutions
- Unknown reasons
In short, spikes can happen anytime anywhere. If you are on the wrong side of it, good luck!
Yet with this knowledge, many folks trade without stop loss. I was one of them previously. I had seen my profits of 3k go to $100 within an hour. So much for clearing my debts!
A STOP LOSS may save your account.
Trading is never about gambling. Experienced traders will tell you that you need a plan. What price to take profit and what price to stop loss.
View this post for forex market timings.
Trade carefully. A profit of 100% 200% 300% sounds good. A loss of 100% and that’s the end of the game.