Stop Out is the point at which your Margin Level drops to a specific threshold (commonly 100% or lower), triggering the automatic liquidation of your open positions. This occurs because your remaining equity is no longer sufficient to maintain your active trades. Note that hitting stop-out is not a violation by itself, like hitting drawdown limits; however, for you as a trader, it might impact your trading if trades are unexpectedly closed.
To clarify, opening one trade or multiple trades that will take 100% of your simulated margin is allowed, but it might result in stop-out closure.
How to avoid hitting Stop-out?
Do not trade the maximum position - Just because leverage allows you to open 25 lots on EURUSD, it does not mean you should.
Monitor the margin level
Set Stop loss
This article will help you determine your maximum position.
For more helpful tips on Margin and its calculation, visit this article
E8 Markets replicates real-market conditions within its simulated environment. Meaning the mechanics of margin logic and stop-out also apply to our Challenge and Performance accounts. Once Margin Level drops below 100%, all positions are automatically closed.
How do I know that my position has been automatically closed due to stop-out?
When a position is unexpectedly closed, and it is not due to hitting SL or TP, or your Drawdown rules, it might be due to the Stop-out Level. The following graphic will help you to confirm the reason behind the closure for each platform.
MT5:
In MT5, when you are in the History Tab, you need to first right-click and switch from "positions" to "Orders & deals" view to see the Stop-out comment.
MTR:
For MTR, in the Closed Positions Tab, you can find a reason for closure by hovering on the (i) button.
cTrader:
cTrader is currently the only platform that will also send you a "Margin call" email and warn you about a possible stop-out event. If you act quickly, you can lower the exposure by closing your trades and avoiding hitting the stop-out level.
Tradelocker:
In Tradelocker, within the Closed positions tab, the Stop Out message can be found in the "Type" column.
Where to follow stop-out levels in each trading platform? (click here for more)
Where to follow stop-out levels in each trading platform? (click here for more)
Once Margin Level drops below 100%, all positions are automatically closed. This is why it might be helpful to track this metric inside the trading platform.
MT5:
MTR:
cTrader:
Tradelocker:
Different platforms might display stop-out differently. For example, in Tradelocker, it looks more like Margin utilization.