Understanding Stop Out at Valutrades

At Valutrades, protecting your account from excessive losses is a priority. One of the key risk-management tools built into the MetaTrader (MT4/MT5) platforms is the stop out mechanism.

This guide explains what stop out means, how it works, and what steps you can take to manage the risks effectively.

What is a Stop Out?

A stop out occurs when your account equity falls below a certain percentage of the required margin. At this point, the platform will automatically begin closing your open positions to protect your account from going into deeper losses.

Margin Level (%) = (Equity ÷ Used Margin) × 100

• Equity = Your account balance ± any floating profit/loss from open positions

• Used Margin = The total margin required to maintain your open positions

When the Margin Level % falls below the stop out threshold, the stop out mechanism is triggered.

Stop Out Levels at Valutrades

The stop-out percentage depends on the leverage you use:

Leverage	Stop Out Level
1:30	50%
1:500	50%
1:200	20%
1:100	10%

• If you are trading with 1:500 leverage, a stop out will occur when your equity falls to 50% of the margin required to keep your trades open.

• If you are using 1:100 leverage, the stop out level is lower, at 10% of the required margin.

These levels ensure that your account doesn’t go into negative territory, minimizing your financial risk.

Example:

• Balance: $1,000

• Open Trade Margin Requirement: $500

• Floating Loss: $800

• Equity: $200

Margin Level = (200 / 500) × 100 = 40%

• If your leverage was 1:500, this falls below the 50% stop out threshold.
• The platform would automatically start closing your largest losing positions until your margin level rises above 50%.

What Happens During a Stop Out?

1. The system automatically identifies the position with the largest floating loss.

2. That position is closed to free up margin.

3. If the margin level is still below the threshold, the next largest losing trade is closed.

4. This continues until your equity is sufficient to support the remaining open positions.

5. This process happens on the server side, so it will occur even if your trading platform is closed or you are offline.

How to Avoid a Stop Out?

While stop outs protect you from deeper losses, they can disrupt your trading plan. Here are steps to reduce the risk:

1. Monitor Your Margin Level Regularly
   • Check the “Trade” tab in your MT4/MT5 platform to stay updated.
2. Use Stop Loss Orders
   • Protect yourself from sudden market moves by setting clear risk limits.
3. Be Cautious with Leverage
   • Higher leverage magnifies both profits and losses. Use it wisely.
4. Add Funds Promptly
   • Depositing additional funds can increase your equity and reduce the chance of a stop out.
5. Avoid High-Volatility Periods
   • Events such as major news releases can trigger fast market movements and increase stop out risks.

By understanding how stop out work and monitoring your margin level closely, you can take proactive steps to manage your risk and maintain control of your trades.

If you require further assistance, our support team is here to help during working hours. Please see: How do I contact Valutrades Customer Support?