liquidation level

Definition

A certain level, expressed as a percentage, that when reached causes a trader's account to automatically begin liquidating his or her forex positions. A trader determines a liquidation level when creating his or her account. The liquidation level is basically an approximation of the amount of margin held by the account, and if the account passes the set level, the trader's risk continues to increase. By automatically liquidating when this level is reached, the trader's risk decreases, and it hopefully prevents the trader from losing more money and being unable to repay the leverage.
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liquidation liquidation margin