How to calculate the **Stop Out** point that the broker will activate with the account, as well as how to calculate the **Margin Call** is the basic knowledge that traders need to understand.

This article does not rephrase the theoretical concepts, just shares the calculation method so that we can easily calculate the danger warning score with the account and the correct balance remaining if **Stop Out**.

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To calculate these two issues, we need to know the regulations of the **forex trading** account at the broker - where we open the account, that is:

- How many is the account leverage?

- How many Margin Call (%)?

- How many StopOut points (%)?

- How specific is the StopOut method?

Based on those 4 factors, and with information about the total number of orders running on the trading account, we can accurately calculate the above 2 issues.

AND THIS IS THE FOLLOWING FORMULA:

**MARGIN LEVEL 100% = (lot number * 100,000) / LEVERAGE**

For example, ABCXYZ Broker has:

- Leverage 1:400

- Margin call level is 100% (will warn red when margin level reaches 100% and below)

- StopOut is 50%

- StopOut method is that the broker will AUTOMATICALLY CLOSE ALL RUNNING ORDERS.

With an account with capital 200usd, there is a total running order of 0.5 lots

So the formula is: margin level 100% = 0.5 * 100,000 / 400 = 125.

=> So if the orders run in the opposite direction of the prediction and the account decreases, when the Equity reaches 125usd, the Margin Level will return to 100% and the account will start warning in red (usually it will be notified simultaneously via email when margin calls). If the account continues to decrease, when the margin level reaches 50%, the account will be STOP OUT, the broker will automatically CUT ALL RUNNING ORDER, then the account balance will be 50% of the margin level - ie 50% of 125usd is 62.5 usd.

Another example with some other brokers, there are:

- Leverage 1:400

- Margin call level is 30%

- StopOut is 20%

- The StopOut method is AUTOMATICALLY CLOSE ORDER WITH BIGGEST VOLUME FIRST.

With an account with 500usd capital, there is a total running order of 2 lots (including 3 orders: 1 lots, 0.6 lots and 0.4 lots).

So margin level 100% = 2 * 100,000 / 400 = 50.

=> So if the orders run against the prediction and the account decreases, then when Equity reaches 150 usd, the margin level will return to 30%, and the account starts to warn red. If it continues to decrease, when the margin level reaches 20% (equity is 100usd), the account will be STOP OUT 1 ORDER and the broker will CUT THE ORDER 1 LOT FIRST - THIS IS THE ORDER with the BIGGEST VOLUME out of the 3 running orders. . After cutting this order, if the price reverses, the account can temporarily get out of danger, then the same calculation for the remaining orders (total 1 lot and margin level at that time is 250) we will also calculate the point. next stop out if the bad situation continues to happen.

Thank you for reading this article, please share if you think it is useful for someone. See you in the next posts

Best regards,

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