Aaron T340 Martin#65

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What is a margin call/stop out in forex and how to avoid it?

A margin call occurs when a trader’s account equity falls close to or below the required margin to maintain open positions. If losses continue and equity drops further, a stop out happens, where the broker automatically closes trades to prevent the account from going negative. This usually occurs when using excessive leverage or holding large positions without enough balance. To avoid margin calls, traders should use conservative leverage, risk only a small percentage of their capital per trade, and monitor free margin levels. Proper stop-loss settings and avoiding overexposure are essential for risk control.