Two trading words

Here are two trading words that should be familiar to anyone who trades.

Margin Call !!!!

What is a margin call ?

Investopedia defines these two trading words in the following way( not a direct quote).

• A broker's demand on an investor to deposit more money or securities so that the margin account is brought up to the minimum maintenance margin. Margin calls occur when your trading account value depresses to a value calculated by the broker's particular formula.
• You would receive a margin call from a broker if one or more of your securities decreased in value past a certain point at which point you are asked to deposit more funds in the account or to liquidate some positions.
• If neither action is taken by the investor and the account loses more value then the broker automatically liquidates all trades in the account as a measure of insurance against further losses, or losses beyond the principle of the investors account value.

Margin call are two trading words that in theory protect both the investor and the broker. Many traders will tell you that margin calls are at the same time an insurance and a weapon of financial trading war where the broker looks for over leveraged trading accounts and purposefully moves markets just enough to force margin calls. The truth to that is an ongoing debate.

Do brokers really hunt down over leveraged accounts in order to weed out the market pigs (pigs get slaughtered ) ?

IMO the question that wasn't asked in the Goldman Sach inquiry was whether or not the GS traders were hunting overleveraged accounts. The inquiry looked into the ethics ( lmfao) of big banking where the good ole Senator kept asking the same futile question of the GS CEO. The question being asked was whether or not GS was trading against their clients and the CEO's answer was always that in that segment of GS there was no guarantee of fudiciary responsibility.

Margin trading is highly risky. Margin money is borrowed money and used as leverage to increase profits. It also increases losses when a trade war is being fought out.

Knowing that is one measure of keeping one's trading within tight parameters.

However everyone who has traded financial markets before knows that psychology is likely a bigger rule that money management.

Is there a way of combining psychology (discipline, poker mentality...etc.), money management, and the dreaded margin call to challenge that oligarch banker or that person or group of people who might or might not be hunting you down.

These two trading words can become just as much an asset as the old saying 'the trend is your friend'.

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I keep wanting to include something about real news and propoganda used in the form of news to move or control market sentiment (thinking Bloomberg's hurry, hurry hard attitude)....however it just isn't fitting. Too bad !!!!