For an account with a 20% stop-out level, stop-out is triggered when its margin level falls to 20% or below. The system may then automatically close open positions because of insufficient margin.
Margin Level = (Equity ÷ Used Margin) × 100%
Equity includes your balance, credit and unrealized profit or loss. Used margin is the margin required to support your open positions.
Example: Calculating stop-out for XAUUSD
This example assumes a USD account with no credit bonus or other positions:
| Item | Assumed value |
|---|---|
| Account balance | USD 1,000 |
| Applicable leverage | 1:500 |
| XAUUSD price | USD 2,300 per ounce |
| Position size | 1 lot |
| Contract size | 100 ounces per lot |
| Stop-out level | 20% |
Step 1: Calculate the required margin
Using the assumed price and leverage:
Required Margin = (Price × Contract Size × Lots) ÷ Leverage
Required Margin = (2,300 × 100 × 1) ÷ 500 = USD 460
Step 2: Calculate the current margin level
If the position has an unrealized loss of USD 20:
Equity = 1,000 − 20 = USD 980
Margin Level = (980 ÷ 460) × 100% ≈ 213.04%
The account is above the 20% stop-out threshold.
Step 3: Calculate the equity at the stop-out threshold
If used margin remains USD 460:
Stop-Out Equity = Used Margin × 20%
Stop-Out Equity = 460 × 0.20 = USD 92
The account reaches the 20% threshold when equity falls to USD 92.
Why can stop-out occur while my balance is still positive?
Stop-out depends on equity relative to used margin, rather than balance alone. Unrealized losses reduce equity even before positions close and those losses are reflected in the balance.
Why does my margin level differ from this example?
Your margin level uses your account’s current equity and total used margin. These depend on your positions, market prices, credit and applicable margin requirements.
Check the current figures in your MT4 or MT5 Trade tab.
Important conditions
The example assumes that used margin remains unchanged. Actual margin requirements may change.
The stop-out threshold triggers liquidation; it does not guarantee that positions will close at exactly that margin level or prevent a negative balance.
