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Is the 50% stop-out operational in the Championship?

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Electronaut
41
Electronaut 2010.10.08 00:45 
I either misundrestood the principle of stop-out or the rules are not applied. Let's calculate: When a bot buys 5.0 lots of GBPUSD with 10.000 balance, than the margin is 7938.6 at present price. Only 2061.4 USD free margin is left in the account. As 50% stop-out level means that the position will be closed if free margin is less than 50% of the margin needed to hold the position, such position should not be opened at all or closed immediately. Something is wrong here.
Valerii Mazurenko
3485
Valerii Mazurenko 2010.10.08 00:59  
Electronaut:
I either misundrestood the principle of stop-out or the rules are not applied. Let's calculate: When a bot buys 5.0 lots of GBPUSD with 10.000 balance, than the margin is 7938.6 at present price. Only 2061.4 USD free margin is left in the account. As 50% stop-out level means that the position will be closed if free margin is less than 50% of the margin needed to hold the position, such position should not be opened at all or closed immediately. Something is wrong here.

Margin Level = (Equity / Margin) * 100;

if Margin Level < 50% -> Stop Out.

 When a bot buys 5 lots of GBPUSD with $10k balance, stop-out would come , when Equity will be less 7938.6 * 0.5 = 3969.3

Electronaut
41
Electronaut 2010.10.08 02:21  
notused:

Margin Level = (Equity / Margin) * 100;

if Margin Level < 50% -> Stop Out.

 When a bot buys 5 lots of GBPUSD with $10k balance, stop-out would come , when Equity will be less 7938.6 * 0.5 = 3969.3

If the stop-out was based on equity than it would be preceded by margin calls which does not make much sense. With 5.0 lots GBPUSD per 10k balance you are immediately cca 40 pips from margin call, you have large equity, but margin call closes all your positions. That is the common practice of fx brokers. Should this be not applied in the Championship then it would be completely unrealistic.
Valerii Mazurenko
3485
Valerii Mazurenko 2010.10.08 02:47  
Electronaut:
If the stop-out was based on equity than it would be preceded by margin calls which does not make much sense. With 5.0 lots GBPUSD per 10k balance you are immediately cca 40 pips from margin call, you have large equity, but margin call closes all your positions. That is the common practice of fx brokers. Should this be not applied in the Championship then it would be completely unrealistic.
Many exUSSR's "brokers" use Margin Call less 50% and Stop Out in diapason 10-30%. I understand than you mean. In terms, used in Metatrader5, you mean that Stop Out = 100%. It's possible, if change appropriate setting at server side of MetaTrader5. But, at championship, Stop Out is staying equal 50%
Daniel Lewis
75482
Daniel Lewis 2012.08.29 15:58  

Thanks to notused as I had the same question for this year's contest.  The wording in this year's article explaining the 50% Stop Out Level rule makes it seem the other way around (i.e. margin must be 50% or more of equity).  Many are used to margin calls when margin exceeds equity.

https://championship.mql5.com/2012/en/news/153 

The example given here by notused should be used in future ATC articles that explain 50% Stop Out Level rule, IMO.

Trading Rules of the Automated Trading Championship 2012 - Automated Trading Championship 2012
  • championship.mql5.com
Any competition consists of the rules mandatory for all its participants. A special group of accounts will be allocated on the trade server for the Championship. These accounts will operate under the definite trading conditions. Each ATC 2012 participant should know that conditions well. In this article you will learn how to prepare an Expert Advisor, so that it matches the Championship trading conditions.
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