100% Margin Call: This means that your account's margin level has dropped to 100%. This occurs when your equity is equal to your used margin. At this point, our broker may notify you that additional funds are needed to keep your positions open. Without immediate action, you risk having your positions closed to prevent further losses.
What Does It Mean to Be at an 80% Stop Out?
80% Stop Out: This indicates that your account's margin level has fallen to 80%. At this level, our broker will start automatically closing your open positions, beginning with the least profitable ones, to free up margin and reduce the risk of additional losses. The purpose of the stop out is to protect both the trader and the broker from greater losses.
Comparison Between Margin Call and Stop Out
Margin Call (100%):
- Occurs when the margin level reaches 100%.
- It is a warning that requires immediate action from the trader.
- Positions are not automatically closed, but funds need to be added to avoid reaching the stop out level.
Stop Out (80%):
- Occurs when the margin level reaches 80%.
- Open positions are automatically closed to free up margin.
- It is a protective measure implemented by the broker to limit losses.
5 Tips for Traders Regarding Margin
- Monitor Your Margin Level Regularly: Always stay aware of your account's margin level. Use MetaTrader tools to check the used margin, free margin, and margin level.
- Use Leverage with Caution: While leverage can increase potential profits, it also increases risk. Make sure to use leverage that you can comfortably manage.
- Set Stop Loss and Take Profit: Configure stop loss and take profit levels to manage risk and protect your capital. This helps maintain control over your losses and secure gains.
- Maintain Sufficient Funds in Your Account: Avoid trading with the minimum required margin. Keep additional funds in your account to cover adverse market movements and avoid margin calls or stop outs.
- Educate Yourself and Stay Informed: Invest time in learning about risk management and trading strategies. Stay updated with market news and technical analysis to make informed decisions.