Learn what Margin Level, Margin Call, and Stop Out mean in forex trading, and discover the specific levels offered by MH Markets.
What is Margin Level?
Margin Level is a key indicator of your account’s health in leveraged trading. It shows the ratio of Equity to Used Margin, expressed as a percentage:
Margin Level = ( EquityUsed Margin) x 100%
A higher Margin Level means you have more free margin available to open new positions. A lower Margin Level indicates you are closer to a Margin Call or Stop Out. Learn more about Fixed and Floating Leverage and Margin calculation.
What is a Margin Call?
A Margin Call occurs when your Margin Level falls below a certain threshold. When you receive a Margin call meaning you are warned that your account does not have enough equity to maintain open positions. You may consider the following actions:
- Deposit additional funds
- Close some positions to free up margin
the Margin Calls are set at 50% on all MH Markets accout types: Standard, Prime and ECN.
If the amount of your own funds in the account falls below 50% of equity, the MT4/MT5 changes color to red to indicate that you are at or near the Stop Out Call level. At this point, nothing will happen to your account. This is just a warning to inform you that your investments are moving against you, and you need to take action.
How does Margin Call look in Meta Trader?
If your Margin Level falls below the margin call percentage set by MH Markets, the Balance and Equity in the Meta Trader terminal, Trade Tab will turn red. You still have time to take action before your positions are stopped out.
In the screenshot below, you can see that the only open trade on the account is currently in a loss. As a result, the account’s Margin Level has dropped below 50%, and the balance line has turned red. This indicates that a Margin Call has been triggered on the account.
What is Stop Out?
If your Margin Level continues to drop and reaches the Stop Out Level, MH Markets will automatically close your positions starting from the largest loss. This prevents your account from going negative.
the Stop Out Levels are 30% on all MH Markets accout types: Standard, Prime and ECN.
How does Stop Out look in Meta Trader?
If your margin level falls below 30%, MH Markets will automatically start closing your positions to prevent your account from going into a negative balance. This process happens gradually: positions will be closed one by one, starting with the trade showing the largest loss, until your margin level is restored above the stop-out threshold. Please note that any orders closed due to a stop-out will be marked as “SO” in your Meta Trader report.
On the screenshot example, the order was closed due to a stop out with the following comment: so: 28.9% / 872.8 / 3020.1:
-
28.9% – Margin Level (%)
This is the margin level at the moment of Stop Out. -
872.8 – Equity
This is the remaining equity in your account at the time of Stop Out. Equity = Balance ± Open P/L. -
3020.1 – Used Margin
This is the margin locked for your open positions at that moment. It shows how much of your funds were tied up.