Surviving in Forex Trading: Understanding Margin Call and Stop-Out for Risk Management.

Margin call and stop out are two related terms in Forex trading that refer to the consequences of a trader's account falling below a certain level of funds.

A margin call is a warning from a broker that the trader's account is running low on funds and that they need to deposit additional funds or close some positions to avoid a complete liquidation of their account.

On the other hand, a stop-out is an automatic liquidation of a trader's positions to prevent further losses if their account balance falls below a certain level. The broker sets the stop-out level, which is typically lower than the margin call level.

Both margin call and stop out are important concepts for traders to understand as they highlight the importance of proper risk management and the need to maintain adequate funds in their trading accounts. By regularly monitoring their account balance and understanding the consequences of falling below certain levels, traders can make informed decisions and avoid potential losses in the Forex market.

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