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Margin Warning, Stop Trading and Stop Out
Posted by Alexander Makhnitsky on 07 September 2012 07:54 PM

Protrader defines separate Margin Call, Stop Trading and Stop Out levels.
Users can find those levels in Account panel.

Margin Call is a Warning Message from a broker that a user's account has dropped below the required margin meaning that there is not enough equity on the account to support the user's open positions and orders. If the user's account remains below this level, Protrader will show the Margin Call message every 3 minutes until the user takes necessary actions (either closing some positions or depositing funds to the account). Users may also contact their brokers to change the Margin Call level which will in turn change the level at which the Margin Call message is displayed.

Stop Trading level is certain required margin level, at which users are no longer able to open new positions. If trying to open new position while exceeding the Stop Trading level, Protrader will display a message that saying there the user's account does not meet the required level of margin to open an additional position.

Stop Out level is also a certain required margin level, at which a trading platform will start to automatically close trading positions.

If a broker provides conditions like these:

Margin Call - 80%
Stop Trading - 95%
Stop Out - 100%

This means that when Margin Used equals 80% of the user's Account Equity for Position and Orders, the user will receive a warning from the broker.
Likewise, as soon as Margin Used equals 95% of the user's Account Equity for Position and Orders, the user will be unable to open additional positions. 
And finally, if the current margin reaches the Stop Out level, the system will automatically close all positions.

 Examples:

There are many configuration settings on server side to calculate Required Margin. Users should contact your broker to define the exact formula for margins. Generally, the Required Margin level for a new position can be seen in Order Entry window. See screenshot below:

Initial Margin - required level of available margin that should be on the balance to open this position.
Maintenance Margin - required level of available margin that should be on the balance to keep this position open.
Generally brokers use same value for Initial and Maintenance Margin.

Lets say that a user wants to open 0.1 lots of EUR/USD at a current market quote. Let's say Required Margin to open this position and keep it open is 50 USD.
That means that the user should have at least 50 USD Available Margin on the account. If the user is going to open 0.2 lots of EUR/USD, then Required Margin is doubled - 100 USD and so on.
Users can also see how much margin each position uses in Positions panel: 



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