How Can a Trader Avoid a Margin Call?
A trader can avoid a margin call by actively managing their risk and maintaining sufficient equity in their account. This involves using lower leverage ratios, which creates a wider buffer between the entry price and the liquidation price.
Additionally, setting stop-loss orders to automatically close the position before it reaches the maintenance margin level is critical. Finally, adding more collateral to the margin account (realizing profits from other trades) can preemptively increase the margin level.
