The margin level at which a broker automatically closes open positions to prevent a negative balance. Understanding exactly how this order type behaves is essential before placing live trades, since it determines precisely when and at what price a position enters or exits the market.
The margin level at which a broker automatically closes open positions to prevent a negative balance. Understanding exactly how this order type behaves is essential before placing live trades, since it determines precisely when and at what price a position enters or exits the market.
It's the final safety mechanism protecting both trader and broker from excessive losses. At the intermediate level, this becomes increasingly relevant as traders begin refining strategies, tightening risk controls, and reading the market more critically.
Usually set as a percentage, such as 20% or 50% margin level. In practice, traders typically encounter this directly within their trading platform, charting software, or an economic calendar, depending on the specific context in which it arises.
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