Stop-out is not a loss-prevention feature. It is a broker's final process for closing positions when the account reaches a specified margin level.
The stop-out level, margin calculation and negative-balance treatment can differ by legal entity, account and instrument. Check the rules that apply to your own account.
Margin level is a changing ratio
A common formula is: Margin level = Equity ÷ Used margin × 100. Equity moves as the profit or loss on open positions changes.
A margin call or stop-out may occur at levels set in the account terms. The exact trigger and order of closure are broker-specific.
- Check the stop-out level for the account
- Confirm the margin requirement for the instrument
- Allow room for spreads and changing market prices
Leverage changes the margin required, not the market risk
Higher leverage can reduce the margin required to open a position, but it does not make an adverse price movement smaller. Position size is still the key driver of monetary risk.
Rapid moves, gaps and reduced liquidity can lead to execution at a worse price than expected.
- Choose position size from the loss side first
- Do not assume a stop-loss order is guaranteed at its requested price
- Keep funds used for trading separate from essential expenses
Read the account terms before funding
Margin requirements, stop-out thresholds and restrictions may change by account type, balance, instrument or market event. The client portal and current terms take priority.
Frequently asked questions
Q. Does a stop-loss guarantee the maximum loss?
A. No. In fast markets or after a gap, an order may be executed at a price worse than requested.
Q. Does lower leverage make a trade safe?
A. No setting makes a trade safe. Lower leverage can reduce margin pressure, but risk still depends on position size, price movement and account equity.
Sources and conditions
FX Textbook is edited from official platform documentation, broker-published information and applicable terms where available. Account conditions, services and rules can change. Confirm the current terms in the broker's registration flow before you act.
FX Textbook is an independent information site, not a broker or provider of personal investment advice. Forex and CFDs involve risk. You may lose some or all of your invested capital. No trading result is guaranteed.
NEXT STEP
Next: check account conditions
Compare margin, platform and account information before you register or deposit.