In this article, you will learn about Margin Call and Stop Out at Trendo and how they function.
Trendo protects traders’ capital against significant losses by setting Margin Call and Stop Out levels and implementing automated mechanisms that prevent account balances from going negative.
Definition: A Margin Call occurs when the total loss of open trades reaches a level where the trader’s Free Margin approaches zero.
Effects: After reaching the Margin Call level, the trader cannot open new positions because there is not enough free margin for additional trades. However, existing open trades remain active. At this stage, the trader can increase the account balance or close some open positions to raise the margin level and prevent reaching the Stop Out stage.
Margin Call Level at Trendo: 100%
This means that traders can use all available free margin for trades until the Margin Level reaches 100%.
Note: A Margin Call is an initial warning before Stop Out.
Definition: A Stop Out occurs when the cumulative loss of open trades reaches a level at which the broker automatically closes positions to protect the account balance.
Stop Out Level at Trendo: 70%
When account losses reach 70% of the balance (equivalent to 30% remaining balance), the broker automatically closes the positions with the highest losses to prevent the account from going negative.
Example:
Suppose your account balance is $1,000, and you have a losing trade. If the loss reaches $700 (i.e., 70% of the account balance), the Margin Level drops to 70%, and Stop Out is triggered. In this situation, the broker automatically closes the losing trade to prevent further depletion of the account balance.
Position Closure Priority: Positions with the highest losses are closed first to restore the Margin Level above 70%. If Stop Out remains active, the next positions are closed in order of loss.
No Manual Intervention: All Margin Call and Stop Out processes are systematic and automatic.
Non-Cancellable: Stop Out is part of the broker’s rules and cannot be canceled.
Risk Management: Traders should manage position size, leverage, daily account balance and margin monitoring, and follow capital management principles (e.g., using Stop Loss) to prevent reaching Stop Out levels.
For more information, read the full article: “Margin Call and Stop Out in Forex Trading.”
In case of any errors at any stage, contact Trendo 24/7 support for guidance.