📢 Margin Call/ Stop Out
If your account falls below the minimum required margin, your positions will be closed automatically to prevent losses beyond your deposited amount.
This process occurs in the order the positions were opened until your account funds rise.
Here's how it plays out:
A 100% margin call is like a caution signal indicating that your funds are now just enough to cover the minimum required margin. It’s a prompt to either close some positions to free up margin or add additional funds to your account.
At the 50% stop out level, action is taken by the broker automatically, ensuring the maximum loss does not exceed the account’s existing funds, thus providing a safety net against negative balance.
🛡️ Risk Management: Stop Loss & Take Profit
Additionally, trades may close automatically if your Stop Loss or Take Profit order is triggered, or when the contract expires. Here's more on these key risk management options you should know:
✋ Stop Loss
Stop Loss orders are like your safety nets. You set a predefined level where, if the market moves against you, your trade will automatically close, limiting potential losses. Think of it as a financial seatbelt - you don't want to drive without it, right?
👍 Take Profit
On the flip side, there's the Take Profit order. Just as you need a plan for potential losses, you need one for potential wins. You can set your Take Profit level to automatically close a trade when it reaches a certain price. It's like securing that golden moment on the roller coaster - you don't want to miss it!
For more information on how to implement these to your orders, read our dedicated article ‘What is Stop Loss and how can I set it?’ and ‘What is Take Profit and how can I set it?’.
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📖 What happens if I ignore my margin call?