“Stop Out” has two different meanings in different financial markets.
In the Forex market, this is the level at which all positions of a trader are automatically liquidated because their margin has been reduced to the point where they cannot support continued open positions.
In other markets, it describes the fact that an open trading position has reached the stop-loss level at which the trader orders a sale.
Once this happens, the trader is described as “Stop Loss“.
Basically, you submitted a pending order in the past, your “stop loss” order, and that order was triggered.
In order to facilitate the understanding of the difference between these two meanings, one is ACTION and the other is STATE (specific condition).
In Forex trading, a stop loss is a action taken by a broker against a client who has insufficient margin.
In other markets, the status of forced liquidation in securities markets is a direct result of following trader instructions.
If you want to learn more foreign exchange trading knowledge, please click: Trading Education.
