In Forex and CFD trading, every time you open a trade, part of your capital is set aside as collateral (margin). If the market moves against your prediction and your remaining account balance decreases, your account loses the ability to keep open trades. To control this risk, Trendo uses two mechanisms, Margin Call and Stop Out, which limit potential losses through a warning and the automatic closing of trades. In this article, you will learn about the concepts of Margin Call and Stop Out at Trendo and how they work.
Balance: The amount in your account, not counting profit or loss from open trades.
Equity: Your account’s real-time remaining value, meaning your balance plus profit or minus loss from open trades.
Used Margin: The portion of your capital that is locked to keep open trades.
Free Margin: The portion of your capital that is not locked and is available to open new trades.
To learn more about common terms used in financial markets, read the article on common trading terms in the Trendo Knowledge Base.
A Margin Call is an initial warning. When your account’s margin level reaches 100% (meaning your equity equals your used margin), your free margin drops to zero and your account enters a Margin Call state.
At this stage:
You cannot open a new trade.
Your current open trades are not closed and remain active.
You can still improve your account status by increasing your balance or closing some of your trades.
A Stop Out is the stage at which the system automatically closes a trade. At Trendo, when the losses on your open trades grow and your remaining account balance reaches 30% of your balance, a Stop Out is executed. In other words, this happens when you have lost about 70% of your account balance.
The purpose of this mechanism is to limit losses and prevent them from growing further. If you have several open trades, the trade with the largest loss is closed.
Suppose your account balance is $1,000 and you have several open trades. When the total loss on your open trades reaches $700, your remaining account balance becomes $300 (30% of your balance) and a Stop Out is executed. In this case, the system closes the trade with the largest loss. (If you have only one open trade, that single trade is closed.)
For more details on Margin Call and Stop Out levels and other trading conditions, read the article on trading rules, fees, and costs at Trendo.
Choose an appropriate volume: Excessive volume locks up too much margin.
Set a Stop Loss: It limits the loss on each trade in advance.
Use leverage correctly: High leverage magnifies both profits and losses.
Practice capital management: Do not commit all your capital to trades.
Check your account regularly: Keep track of your equity and margin level.
To change the leverage of your Trendo trading account, read the article on how to change leverage.
These mechanisms are designed to control account risk and prevent losses from growing excessively. The Margin Call and Stop Out levels are set according to each broker’s rules.
Margin Call and Stop Out are carried out automatically, and manual intervention is not possible.
The deposit bonus is not counted as part of your balance in the Stop Out calculation. Only your actual remaining account balance matters.
Stop Out is part of the broker’s rules and cannot be canceled.
If you have any questions or problems, contact Trendo’s 24-hour support.
1. What is the difference between Margin Call and Stop Out?
A Margin Call is only a warning. At this stage, you cannot open a new trade, but your open trades are not closed. A Stop Out is the stage at which the system automatically closes a trade.
2. When is a Stop Out executed at Trendo?
A Stop Out is executed when the losses on your open trades grow and your remaining account balance reaches 30% of your balance.
3. If I have several open trades, which one is closed?
The trade with the largest loss is closed. If you have only one open trade, that trade is closed.
4. Is the deposit bonus counted in the Stop Out calculation?
No. The deposit bonus is not part of your balance in the Stop Out calculation, and only your actual remaining account balance matters.
5. How can I avoid a Margin Call and Stop Out?
Increase your account balance, close some of your open trades, choose a trading volume proportionate to your balance, and set a Stop Loss for each trade. Capital and risk management are also the most important factors in staying away from these stages.