Stop loss "refers to the mandatory automatic closure of a trader's position when the net value of their trading account falls below a specific threshold.
As long as you have an open position, the margin level will increase by % Displayed on the platform in the form of, the calculation formula is: net value / Initial margin *100
Net value refers to the balance in each trading account + Unrealized gains and losses, excluding you FxPro Any balance in the wallet.
example:
The mandatory closing level for all our platforms and account types is 50%。 This means that once your net worth drops to an amount equal to your initial margin 50% The value of will begin to show a stop loss.
Therefore, the initial deposit is 1000 USD, initial margin is 100 USD, your remaining available deposit is 900 USD. If the loss reaches 900 USD, your remaining available margin will be 0At this point, your margin level % Will be 100%(100 equity/100 Initial margin = 100%)。 If the loss continues and ultimately reaches 950 USD, will trigger 50% Stop loss. (50 Equity / 100 Used margin = 50%)
Now that we have explained how to apply a stop loss, let's take a look at an example of the price at which you will be stopped.
You pay per barrel 55 The price in US dollars has been opened 100 Barrels of Brent oil(0.1 The buying position of the hand. Use of this position 10 times (1:10) Leverage, your account has 600 USD.
The initial margin is risk exposure 1/10= 10%。 In this case, the exposure is 100 Bucket multiplied by 55 = 5,500 USD. Therefore, your initial margin is 550, Remaining 50 Available margin in US dollars.
The price is starting to decline, and we would like to know at what price the equity will be equal to the initial margin 50%。 For this, we need to calculate the loss as 550 = 275 of 50% Add the price of the available margin, as we explained in the example above, the loss is first used to offset the available margin. Therefore, due to our position being 100 Barrel, the total loss will be 325 Or per barrel 3.25。 When prices fall 3.25 And achieve (50-3.25) 46.75 In US dollars, which is the buying price, you will be stopped from losing and eliminated.
Stop Out Helps prevent negative balances in trading accounts, but in highly volatile markets or during market gaps, orders may not always be able to be executed at a specific level and Stop out There may be obvious slippage points when placing an order.