The loss room

Where the line sits

The line is what the wallet owes, plus a cushion. The Backer is owed $2,120 and Arlo $30, so $2,150 in all. Add the $50 cushion and you reach $2,200. Everything above the line is room.

How a trade uses room

A trade’s charge is its loss if it closes at its stop, plus $1 and 0.10% of its size to close it. Say you open $15,000 of Bitcoin with your stop 2% away. It loses $300 at the stop. Add $16 to close it, and it uses $316. That leaves $484 for other trades.

• A trade with no stop counts its whole margin.
• So does a trade whose stop GMX has frozen, until you replace the stop.
• A take profit does not change the charge.

What frees room

Closing a trade, closing part of one, or moving its stop closer frees room straight away. These are always allowed, even when the room is full. You can always make your trades less risky.

The closing allowance comes back too. When a trade closes, everything it held back returns to the room.

Why falling prices do not use it up

Say a trade is open and the price moves against you. The wallet’s value falls. But the trade is now closer to its stop, so its loss left to the stop falls by the same amount. The room you have left does not change.

So the line is reached only when trades lose more than their stops allowed: when prices jump past stops, or when a stop freezes while prices fall. That is rare, and it is what the cushion is for.

When the line is reached

If the wallet’s value falls to $2,200, trading stops. Every trade closes and the Arlo ends. It cannot be topped up or restarted.

The code checks the wallet’s value, with open trades counted at GMX’s prices. Anyone can ask it to check. It closes trades only when the wallet has really reached the line, so nobody can close a healthy Arlo.

On testnet, GMX does not publish its live prices, so the line counts each open trade at the margin put into it. Stops still close trades at their prices.