What Is Stop Out In Forex. This occurs because the trader, who is trading with leverage, runs out of available margin. A stop out level in forex is something that happens when a trader's open positions are automatically closed by their forex broker.
A stop loss is an order type used in forex trading designed to limit losses from a trade. In forex trading, a Stop Out Level is when your Margin Level falls to a specific percentage (%) level in which one or all of your open positions are closed automatically ("liquidated") by your broker. Now that you know what Margin Call and Free Margin are, it's time to find out what Stop Out means.
This liquidation takes place as a result of the trading account's inability to fund the open positions due to a margin shortage.
The order will trigger a trade to be closed at a loss.
Stop out is an expression with two different meanings in different financial markets. Every broker sets their own Stop Out level, and at FXTM you can see exactly at what point Stop Out would. To explain it in layman's terms, stop out is basically automatic liquidation of all positions in the trader's account in cases where there is not enough money to maintain them.