A brief definition of the term stop-out

The Amega Geek avatar
Written by The Amega Geek
Updated over a week ago

A stop-out occurs when your margin level falls to a specific percentage level (at Amega, the percentage is 20%), causing one or all of your trading positions to be closed automatically.
The reason for this is that your trading account has reached a margin so low that it can no longer sustain the open positions.

It is the equivalent of a Game Over message on a video game.

A stop-out can be prevented as far as the Margin Call point. After that, it is impossible to stop, so it is a good practice to keep a close eye on your trades, especially when they are at a loss.

💡 Tip

Risk management tools such as stop-loss and take-profit are critical in preventing a stop-out. Always have at least one in place, before opening a position.

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