Equity Level Stop / Stop Loss Level
Traders and clients have the ability to set a stop trading feature based on the level of equity rather than the amount of loss. They define an absolute level of equity from or under which they want the account to be stopped, and their exposures closed. The equity stop is in the account base currency, and acts as a trigger should the equity reaches, or goes under the value of the equity stop. Upon trigger, any exposure is closed at the market and the account is blocked, preventing any further trading until further client notice.
WARNING! The stop equity level is a trigger value and does not imply that the equity remaining after the completion of the stop procedure would be of that value. Once triggered, and as exposures are closed at the market, the deviation from the value of the equity after the stop completion depends on the volatility of the market at the time of triggering, as well as on the liquidity, spread and market conditions of any particular instrument in which the account is exposed. Furthermore, any position, or component exposure is closed independently from the net exposure. If the account holds hedged exposures at the time of trigger, long positions are closed at the market bid, and short positions are closed at the market ask, which imply some market spread cost.
WARNING! If the stop equity value is equal or above the equity at the time the instruction is sent, it will trigger the closure of existing exposures and block the account immediately. Although a validation facility warns the trader in the case of such input, and requires further confirmation, it remains possible to stop the account immediately this way.
