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What is a stop-out level? What is the percentage?
07/10/2025 06:43:07
A forced stop-out occurs when your account's funds are insufficient to maintain your current position, and the system automatically closes some or all of your positions to prevent further losses.
At DecodeFX, the forced stop-out ratio is set at 50%:
- Triggering Condition: When your account equity (deposits - withdrawals ± floating profit and loss) falls below or equals 50% of your used margin, a forced stop-out is triggered.
- Execution Method: The platform will close your positions based on risk priority to prevent further losses.
For example: If your position requires a $1,000 margin and your account equity falls below $500, a forced stop-out will be triggered.
Why is a forced stop-out necessary?
- To prevent your account from reaching zero or incurring a negative balance;
- To protect client funds and mitigate risk in extreme market conditions.
Note:
- During periods of extreme market volatility or major news releases, the actual stop-out price may differ from your expected price. This is a normal market phenomenon caused by price gaps or insufficient liquidity.
- To avoid forced liquidation, we recommend monitoring your margin requirements, managing your positions appropriately, and utilizing stop-loss and take-profit tools.
- During periods of significant market volatility or rapid price fluctuations, forced liquidation is not guaranteed to occur at the exact 50% level and may deviate. This is considered normal market risk.