Liquidation FAQs

1. What is FOREX.com's liquidation process?
2. How can I prevent liquidation of my open positions?
3. What is liquidation?

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 and MetaTrader (4/5) (during normal market hours): 
  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. 

• Weekend Cryptocurrency CFD trading:
  Over the weekend*, only cryptocurrency CFD markets are open and tradable. Therefore, if the equity in your account drops below 100% of the required margin during the weekend, your cryptocurrency CFD positions will be subject to liquidation — regardless of whether they are in profit or loss. — and we may close any or all of your cryptocurrency CFD positions while your account equity remains below the 100% margin requirement over the weekend. During normal market hours, cryptocurrency CFD liquidations will be handled in accordance with the procedures described in the applicable platform sections above. Positions in other asset classes that are not actively trading will not be liquidated during the weekend, however, your account may be subject to further liquidations when other markets open depending on your available margin at that time.

*“Weekend” means the period between the normal market close time on Friday (or Saturday, depending on your time zone) and the normal market open time on Sunday (or Monday, depending on your time zone). Please refer to the trading platform for market hours for the time zone where you are located.

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.