Quick answer: Leveraged trading can cause losses to increase quickly. Monitor equity, used margin, free margin and margin level while positions or orders are open.
Monitor the account
In MT4 or MT5, review:
Account metric | What it shows |
Balance | funds after closed transactions |
Equity | balance adjusted for current open-position profit or loss |
Margin | funds allocated to support open positions |
Free Margin | funds available to support additional exposure or losses |
Margin Level (%) | the relationship between equity and used margin. |
Check the current specification: The account's margin-call and stop-out settings are shown in the applicable account or instrument specifications. The applicable percentages can vary.
What happens to margin when I close one side of a hedge?
Closing one side of a full hedge leaves the other side uncovered. For example, after closing the sell side of a 1-lot buy and 1-lot sell in the same instrument, the remaining 1-lot buy requires margin immediately under the leverage and margin rules applicable at that time. This is margin on the position left open, not a newly opened position. A partial closure can also leave some volume uncovered.
The same principle applies during a designated news window, from 15 minutes before to 15 minutes after release. If you close one side then, the remaining uncovered volume uses the margin and leverage applicable then. A lower leverage limit can require more margin. The temporary policy's account and entity exclusions, affected products and lower limits still apply; this does not place every product at 1:200.
An increase in used margin can reduce free margin and margin level even though you closed a position. If the account reaches its applicable stop-out level, positions may be closed automatically. A reduction in free margin alone does not establish that stop-out must occur. Zero hedged margin does not remove spreads, swaps, commissions, price-gap or stop-out risk. Review the remaining exposure and applicable conditions before submitting a closure; after execution, check the account's displayed margin figures.
Actions available to the account holder
Reduce exposure or add funds
Depending on the account and market, an account holder may choose to reduce exposure, close positions, cancel working orders or add funds. Each action has risks and may not prevent a stop-out, particularly during rapid price movements, gaps or reduced liquidity.
Use monitoring tools
Stop-loss orders, take-profit orders and alerts can assist with account monitoring, but they do not guarantee execution at a requested price or prevent loss.
FXTRADING.com cannot tell you which position to close, how much to deposit, what stop level to use or what percentage of the account to risk.
If positions are closed automatically
Review the account history, price data and specification that applied at the time. The sequence and execution of automatic closures depend on the platform and account conditions.
Information to provide: Contact our Customer Support Team through the Service Hub in your Client Portal if a transaction record or platform event is unclear. Provide the account number, order references, instrument, relevant timestamps and screenshots. Never provide a password or one-time code.