Smart Stop Out questions

Spotware
17 Oct 2016, 10:02 ( Updated at: 21 Dec 2023, 09:20 )

Hello,

Thanks for the questions about Smart Stop Out. 

1) You can find the "Smart Stop Out" level in the same place as you found "Stop Out". It is identified in the balance bar. Smart Stop Out replaces Stop Out. 

2) If it is the case that you have positions of equal size but different entry prices then the position which is most unprofitable will be partially closed until the accounts margin level increases above Stop Out. 

3) The largest position will be affected. Unless there are positions of equal size, then the largest and most unprofitable position will be partially closed. 

4) The position which is most unprofitable will be partially closed. 

For the benefit of other people reading this thread; here is the page we are discussing = http://help.spotware.com/trading/smart-stop-out 

maxim_7
18 Oct 2016, 00:00

RE:

Spotware said:

Hello,

...

4) The position which is most unprofitable will be partially closed. 

For the benefit of other people reading this thread; here is the page we are discussing = http://help.spotware.com/trading/smart-stop-out 

Hi Support,

I am not comfortable with 4), I do not understand how closing of "most unprofitable" will help to maintain Margin Level above Stop Out.

If I have 2 positions Long and Short with equal volumes, and price goes down. (Let say Long stay unprofitable and Short became profitable) In this case, "most unprofitable" became Long position, isn't it?

According to your explanation server will partially close Long position, BUT this action will do nothing: “Equity” will not be changed. Margin Level = “Equity” /"Margin Used", "Margin Used" will not be affected since Server closes only side of two positions, thus  Margin Level remain below Stop Out.

I predict the next step of server: On next tick server will close, some more from Long position, w/o affecting Margin Used - and gradually will close Long position totally.

Therefore, my question is: Could you please explain background of "Smart Stop Out" algorithm. Obviously I am missing something here and cannot understand where "Smart" is?

Thanx

M.