What is a Margin Call ?
If the equity balance in your account falls below the margin requirement (available margin becomes zero), a margin call will be executed. Your broker will liquidate your open positions immediately one by one until your margin is enough, to prevent your account from falling into a negative balance.
Available Margin = Your Balance - Used Margin Requirement + Profit (or -Loss)
Example :
You have $1500 in balance, then you open a standard lot of $100,000. Lets say the leverage is 1:100. At this point, your margin requirement is $1000, the rest is your available margin ($500). Available margin is all the money you have to hold losing positions. We can determine that your ability to hold the loss is available margin devided by pip value, or $500 / $10 = 50 pips only !
When things go wrong, and your losing position falls below margin requirement (minus 50 pips) it means your available margin is zero. And before your balance becomes negative, your broker will instantly liquidate the open position. And the margin requirement ($1000) will be credited back to your balance (you get a $500 loss).
