How to avoid a stop-out?
To prevent a stop-out, consider the following strategies:
Maintain sufficient margin:
Always ensure that your account balance is above the required margin. This provides a buffer against market fluctuations.
Use stop-loss orders:
Implement stop-loss orders to limit potential losses on your trades. This helps protect your equity and prevents your margin level from falling too low.
Monitor your margin level:
Regularly check your margin level to stay informed about your account's status. This allows you to take action if it approaches the stop-out level.
Trade during stable conditions:
Avoid trading during high-volatility periods or major news events, as these can lead to rapid price movements and increased risk of stop-out.
Reduce position sizes:
Consider lowering the size of your positions to manage risk better. Smaller trades require less margin and can help maintain a safer margin level.