Liquidation FAQs
What is FOREX.com's liquidation process?
You are responsible for monitoring your account and maintaining 100% of required margin at all times to support your open positions.
If at any point the equity in your account drops below 100% of the required margin, your open positions will be subject to auto-liquidation. The liquidation process depends on the trading platform that you are using and, in the case of certain CFD markets, the timing of the liquidation:
- Proprietary FOREX.com platforms (during normal market hours):
The net aggregated open position with the greatest unrealized loss first will be subject to liquidation first, followed by the net aggregated open position with next largest unrealized loss, and so on, until the maintenance margin requirement is satisfied or exceeded. Depending on the size and unrealized P&L of your positions, all open positions may be liquidated to meet the margin requirement. - MetaTrader platforms (during normal market hours):
The liquidation process for the MetaTrader platforms is slightly different. Instead of the net aggregate position, the individual open trade with the largest unrealized loss will be subject to liquidation first, followed by the individual open trade with the next largest unrealized loss, and so on, until the maintenance margin requirement is satisfied or exceeded. Depending on the size and unrealized P&L of the open positions, all open positions may be liquidated in order to meet the margin requirement.
You can also set up alerts so you are notified by e-mail when the available margin in your account falls below 120% of the margin requirement. Please note that this notification is for your convenience only and should not be relied upon to protect your account.
While our 100% margin requirement and real-time margin system are designed to limit your trading losses and help ensure that total losses do not exceed your account balance, you still risk incurring losses greater than your account balance, especially during periods of extreme market volatility. For this reason, we strongly encourage you to manage your use of leverage carefully. Increasing leverage increases risk.
How can I prevent liquidation of my open positions?
There are several proactive measures that you can employ to prevent liquidation and manage risk:
- Actively monitor the status of your open positions.
- Specify a stop-loss order for each open trade to limit downside risk. You can specify the stop-loss rate at the time you issue a trade, or add a stop-loss order at any time for any open trade. You can also change your stop-loss orders at any time to take current market prices or other conditions into account. The use of stop loss orders may not necessarily limit your losses.
- Keep your account funded in excess of your required margin. These extra funds act as a cushion, protecting you if the market moves against you. If you are in danger of breaching your margin limits, either incrementally reduce the size of your position or add funds to your account as soon as possible.
Learn more about managing risk.