Great explanation, Nagaraja.
Here's how this over-the-weekend leverage works.Standard algorithm
: Over-the-weekend trading conditions are effective starting 3-4 hours before each market closure (weekend, holidays, etc) until re-opening of the market. For usual Friday night closure, over-the-weekend conditions would become effective at 18:00 [GMT]. As a result of leverage contraction, the use of leverage can increase if the account has exposure. Regardless of the over-the-weekend margin conditions, the general execution mechanisms of the margin call and margin cut remain the same. That is, if the amount of equity on the account is not sufficient to support existing positions with a leverage of 1:30, the margin cut procedure will be applied to the account (see paragraph Margin Call and Margin Cut).Margin call
(use of leverage >100%) means a situation where the margin requirements do not allow the client to increase exposure on his account.The client may only close the existing unhedged positions or hedge current positions in order to reduce exposure. Despite the margin call level being reached, the positions will not be closed automatically. The automated system will cancel all placed bid/offer orders that can increase the exposure.Margin cut
or cut-off level (use of leverage ≥ 200%) - if the use of leverage reaches or exceeds 200%, Dukascopy Bank has the right (but not the obligation) to fully or partially reduce the client's exposure by closing existing positions and/or by opening new positions in the opposite direction. Usually the system automatically reduces exposure so that the use of leverage is brought to approximately 100%. However, self-traders can set full close of all open positions in case of margin cut.http://www.dukascopy.com/swiss/english/ ... ts/margin/
So, as it was told previously - don't be overexposed at 18:00 GMT, on Friday. We understand that in order to maximize your capital growth in the Contest traders tend to go for very risky trades...
This is contrary to our philosophy: we wanted all of our contests to be educative in a way. It's the closest simulation of trading you can get because the real money is involved here, not some abstract demo currency.