What is FOREX.com's liquidation process?
By default, if at any point the equity available drops below 100% of the margin required you will be subject to auto liquidation of the position incurring the largest loss. The liquidation process for both the FOREX.com platforms and MetaTrader platforms is as follows: the net aggregated open position with the greatest unrealized loss is closed first, followed by the next largest losing position 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.
When your account falls below 120% margin, a margin alert will automatically be sent to you via email. This notification is for your convenience and should not be relied on to protect your account.
While our 100% margin requirement and real-time margin system is designed to limit your trading losses and help ensure that total losses never exceed your total account balance, you do 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. Remember that increased 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.