As margin and Stop Out Levels are key to consider always while opening trade, Out of the thousands of Broker around the world, Each retail forex broker or CFD provider sets their own Margin Call Level and Stop Out Level.
It‘s very significant to know what your broker’s Margin Call and Stop Out Levels are. A lot of traders dont even care to find out what they are before opening a trading live account, they just jump right into trading with any broker. These levels are often ignored or bypass by traders to the detriment of their account.
Series of forex brokers handle a Margin Call in different ways. Some brokers consider a Margin Call and Stop Out as just one and the same, meaning they will not send you a warning message, they will only just start closing your trades along with a message notifying you of the action just.
For instance, a broker may decide to set their Margin Call Level at 100% with no separate Stop Out Level. This means that if the Margin Level of your account drops below 100%. That your broker will just automatically close your position no need to send you any warnings.
On the other hand, Other brokers consider a Margin Call and Stop Out differently. They use a Margin Call as a kind of an early warning message to notify you that your positions are at risk of being liquidated Stop Out).
For example, a broker may set their Margin Call Level at 100% and their Stop Out Level at 20%.
This means that if your Margin Level drops lower than 100%, you will receive a WARNING from your broker that you need to close your trade or deposit more money or risk reaching the Stop Out Level.
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