Risk warning: This content is for educational purposes only and not financial advice. Forex trading involves risk, and you can lose money.
Margin call vs stop out (what your broker watches)
Brokers monitor your margin level to decide when to warn you (margin call) or when to protect the account by force-closing positions (stop out). Exact percentages and behavior vary by broker.
- Margin level: a ratio based on equity and used margin
- Margin call: warning / restrictions may kick in (depends on broker)
- Stop out: positions get closed automatically to reduce risk
- Root cause: position size too large for your account buffer
Stop out isn’t bad luck — it’s oversized exposure.
Margin level buffer (quick check)
Inputs
Results
Equity
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Margin level
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Buffer to margin call
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Buffer to stop out
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“Margin problems start with position size, not with bad luck.”
Estimate only. Brokers may apply platform-specific rules and rounding.
Margin call vs stop out (simple difference)
- Margin call: a warning level where the broker tells you your margin is low (exact behavior depends on broker).
- Stop out: a forced level where the broker starts closing positions to prevent your account from going negative.
What causes margin calls?
- Oversized positions: position size too large relative to your account balance.
- Stacked risk: holding multiple correlated trades (risk adds up fast).
- Fast adverse moves: high volatility or gaps moving price quickly against you.
Margin level (the core number)
Most platforms show a margin level percentage. It’s the broker’s quick “account health” metric.
- Equity: balance + open P/L
- Used margin: margin locked to keep positions open
- Margin level: (equity ÷ used margin) × 100
What happens when you hit these levels
- Near margin call: you may get a warning and/or restrictions (some brokers block new trades before forced closes).
- At stop out: the broker starts closing positions automatically until margin level recovers (closing logic varies by broker/platform).
- Important: this is about margin health — your trading plan should still be defined by a stop loss and position sizing.
How to avoid it
- Use smaller lot sizes: size trades based on risk, not on maximum leverage.
- Always use a stop loss: define the maximum loss before you enter.
- Avoid grid/martingale: these can stack risk fast and trigger forced closes.
- Keep free margin buffer: don’t run your account at the limit.
If you’re getting close (quick checklist)
- Reduce exposure: close the weakest trades first (especially if you stacked correlated positions).
- Stop adding trades: avoid “averaging down” or grid behavior when margin is already stressed.
- Check spreads & gaps: wideners can push equity faster than expected (see spreads and gaps).
- Next time: lower lot size and calculate it risk-based.