Stopout
Stopout
Implement risk control to avoid frequent forced liquidation by the system is the key to successful trading
Implement risk control to avoid frequent forced liquidation by the system is the key to successful trading
The margin level shall not be less than 50%
The margin level shall not be less than 50%
When account equity is less than 50% of the used margin, the order with maximum loss will be closed by the system until the margin level is above 50%.
A red bar will show when the margin level is less than 150%
A red bar will show when the margin level is less than 150%
When account equity is less than 150% of the used margin, the gray balance information bar in your trading terminal will turn red.
Positions Locking cannot avoid forced liquidation by the system
Positions Locking cannot avoid forced liquidation by the system
When the margin is severely insufficient, locking the positions cannot guarantee to avoid forced liquidation during to overnight interests and possible enlargerd spreads.
Develop good habit of position control
Develop good habit of position control
When using too high leverage or holding too large positions, once the market is against you and no stop-loss is set, it may easily give rise to forced liquidation.
Important FAQs about stopout
Important FAQs about stopout
Almost all OTC derivatives trading such as FX / CFDs involve leverage. In the case that the investor’s account balance cannot reach the contract value of the product, the trading can be completed by borrowing funds. In principle, the client may lose all own capital instead of credit funds. Therefore, when the margin level is lower than 50% , the trading system will automatically close the order with maximum loss until it is above it.
There is a comment column for each order in MetaTrader 4. For the order that triggers forced liquidation, you can find a character string beginning with "so:" in the comment.
After the forced liquidation is triggered, if the free margin is positive, investors can trade at any time. But if it is negative, you cannot create a new order.
When account equity is less than 150% of the used margin, the gray balance information bar in your trading terminal will turn red. This means that if you do nothing at this time and the marke continues to move against your expectation, you will be at risk of forced liquidation.
Only when clients implement risk control, can they reduce and avoid forced liquidation. Setting a stop loss is the most simple and direct strategy. In addition, controlling the positions to avoid too much risk exposure is also an effective way. When the margin is severely insufficient, locking the positions cannot guarantee to avoid forced liquidation during to overnight interests and possible enlargerd spreads.