What is a stop-out in leveraged trading?
A stop-out is the automatic, forced closing of a leveraged position when its loss reaches the margin you reserved for it. It's the broker's circuit-breaker — it prevents your account from going below zero.
With leverage, losses can exceed your deposit alarmingly fast — a 30:1 position only needs a ~3.3% adverse move to consume its entire margin. The stop-out fires before that happens, closing the position at market and returning whatever margin is left.
A stop-out is always worse than your own stop-loss: it happens at the worst price, by definition, after you've lost the whole margin slice. If your positions regularly get stopped out, the lesson isn't 'bad luck' — it's that the position size or leverage is too big for the stop distance. Practicing on virtual money makes that lesson free.
Learn it by doing — on virtual money
Poshkan is a free paper-trading simulator for stocks, crypto, and forex. Every trade, every stop-loss, every pip is 100% virtual — so mistakes cost nothing while the lessons stick.
Create a free accountEducational content, not financial advice. Poshkan is a paper-trading simulator — all money, trades, and returns are 100% virtual.