What a margin call actually is
When you trade with leverage, you put up only a fraction of a position's value as 'margin' — a deposit that acts as a cushion against losses. A margin call is the broker warning you that losses have eaten too far into that cushion and your account no longer has enough free margin to support your open trades.
Think of it as a low-fuel light. It is not the crash; it is the warning before it. If you ignore it and losses continue, the broker will start force-closing your positions to protect itself — the 'stop-out'.
What triggers it
Margin calls are driven by your margin level — roughly your account equity compared with the margin your open trades require. As open positions lose money, your equity falls, the margin level drops, and once it crosses the broker's margin-call threshold, you are warned.
The deeper cause is almost always the same combination: positions that are too large for the account and too much leverage. A small adverse move then produces an outsized loss relative to your balance, and the cushion disappears fast.
What happens if you ignore it
If the market keeps moving against you and your margin level keeps falling, it reaches the stop-out level, and the broker automatically closes positions — usually starting with the biggest loser — until the account is back within safe limits. You do not choose which trades close or when; the platform does, often at the worst possible moment.
This is why a margin call should be treated as a serious prompt to act, not a notification to dismiss. By the time the stop-out hits, your choices are gone.
How to avoid margin calls
The reliable fixes are all about sizing and cushion: use low leverage, keep each position small relative to your account, and always leave plenty of free margin rather than trading close to the limit. Use stop-losses so a losing trade closes on your terms at a small, planned loss — long before margin becomes an issue.
A simple habit helps: before opening a trade, ask what happens to your margin level if this position moves, say, a normal day's range against you. If the answer is 'I'd be near a margin call', the position is too big. Trade smaller and the margin call largely takes care of itself.