What is a stop-out level in forex?

A stop-out is your broker closing open positions for you because the account’s margin level has fallen to a set threshold, the stop-out level. For EU retail CFD accounts that level is 50%: once the funds in the account plus open profit or loss fall below half of the initial margin the positions required, the broker must close one or more of them.

How the stop-out level works

MT5 calculates the margin level as equity ÷ margin × 100 (MT5 help). Equity is the balance plus the floating profit or loss of open trades. Margin is the deposit those trades tie up. As a trade loses, equity falls and the margin level falls with it.

Brokers usually set two levels:

The 50% rule comes from the margin close-out protection ESMA set for retail clients in 2018, now applied by national regulators under their own measures. Australia’s ASIC order has required a similar close-out for retail CFD clients since 29 March 2021, set at 50% of the initial margin or higher. Elsewhere, the broker sets its own levels, as a percentage or as an amount of money.

The margin calculator shows how far the price can move against a position before a stop-out at a given level.

Stop-outs in MT5

• Where you see it. The account line on the Trade tab of the Toolbox (View → Toolbox, or Ctrl+T) shows balance, equity, margin, free margin and margin level. It turns red when the account is in the Margin Call or Stop Out state.
• What closes first. In the normal mode, “Stop Out causes the position having the largest loss to be closed first” (MT5 help).
• For an EA. The broker’s levels can be read with AccountInfoDouble(ACCOUNT_MARGIN_SO_CALL) and ACCOUNT_MARGIN_SO_SO, in percent or money depending on ACCOUNT_MARGIN_SO_MODE. A deal closed by a stop-out carries the reason DEAL_REASON_SO (MQL5 docs).

A common mistake

Treating the stop-out as a safety net. In the example, it fires after 75% of the account is gone. It closes at the next available price, so in a fast market or a weekend gap, equity can already be far below the level, or below zero, when the close fills. That is the case negative balance protection covers, where it applies. High leverage adds to this: less margin per position lets a large position look comfortable on the margin level.

Stop-outs and automated trading

An Expert Advisor that sizes each trade from a small risk and attaches a stop loss usually hits its own stops long before the account reaches a stop-out. EAs that trade without stops or keep adding positions, as in martingale and grid trading, are the ones that tend to end in one.

PipWarden attaches a stop loss to every order and sizes it from your risk per trade. By default, it also skips a trade that would leave free margin below 20% of equity, which means a margin level of at least 125% at the time of the check. That is a check before each order, not a floor: prices that move later still move the margin level. For the wider picture, read why most forex traders lose money.