Direct answer
You get a margin call in forex when the equity in your trading account falls to the broker’s required minimum level for your open positions—so there is not enough free margin to maintain them.
In other words, after losses, your account equity declines. If that decline makes your equity insufficient relative to the margin your positions require, the broker triggers a margin call.
How it works (key terms and the trigger)
A forex margin setup typically involves three related quantities:
- Equity: the account value including the balance plus current profit or loss from open positions.
- Required margin: the amount of margin the broker needs to keep your current positions open at your current leverage.
- Free margin: equity minus required margin (often used to gauge how much buffer you still have).
A margin call is an alert or rule that the broker applies when your account buffer becomes too small—usually when a margin level falls to a broker-defined threshold.
Even though people often describe it as “when price drops,” the practical trigger is the relationship between equity and required margin. As prices move against you, unrealized losses reduce equity. As equity falls, free margin shrinks. When the broker’s margin call level is reached, the broker issues the margin call.
Example checks (how to reason about it without real-time data)
Assume you hold open forex positions that require a certain amount of required margin. If your positions move against you, your unrealized losses increase and equity decreases.
- Check 1: Equity vs. required margin. If equity becomes close to required margin, free margin approaches zero, increasing the chance of a margin call.
- Check 2: Margin level concept. Many platforms monitor a margin level measure that reflects how much equity you have per unit of required margin. Falling margin level generally means you’re approaching the broker’s thresholds.
- Check 3: Margin call vs. stop-out. A margin call and a later “stop-out” (forced closing) are commonly handled as separate stages. The margin call is the earlier warning threshold; stop-out is a later, more severe threshold when positions may be automatically closed.
Because exact formulas and thresholds vary by broker and account type, you should treat these as conceptual checks and use the broker’s published margin policy for the precise numbers.
Limitations and risks (what you can and cannot verify)
- Thresholds vary: The specific margin call trigger level is set by the broker and can differ across platforms, account types, and jurisdictions.
- Timing and execution effects: Margin calls can depend on how often equity and margin metrics are updated, and on how quickly losses are reflected in your account.
- No single “price level” guarantee: Even if you know your leverage, spreads, and position sizing, exact outcomes depend on the broker’s calculations and real-time account updates.
- No personal circumstances assumed: Your own margin call point depends on your open positions, sizing, leverage settings, and the broker’s margin rules—so general guidance cannot replace your broker’s documentation.
To independently verify your own margin call risk, review your broker’s margin policy for the margin call and stop-out thresholds and understand which metrics your platform uses.