Risk management is the foundation of every successful trading strategy. Traders depend heavily on tools like Stop Loss (SL) and Take Profit (TP) orders to manage their exposure and lock in gains. However, problems arise when a broker introduces an auto-disable of SL/TP during drawdown without the trader’s consent. This practice can lead to uncontrolled losses, missed targets, and serious damage to trading accounts. Understanding why this happens and how to guard against it is critical for long-term trading success.

Why Would a Broker Disable SL/TP During Drawdowns?

SL and TP orders are designed to execute automatically once the market hits a set price. Under normal, ethical conditions, they should always remain active. However, a auto-disable of SL/TP during drawdown could happen for several reasons:

• Preventing large losses for the broker: Brokers operating a B-Book model (taking the other side of client trades) might disable SLs to force margin calls instead of honouring set exit points.
• Extending trader exposure: Disabling SLs and TPs keeps traders in losing positions longer, potentially leading to full account wipes.
• Reducing payout obligations: Preventing TP orders from triggering during volatile periods saves brokers from paying profitable exits.
• Technical justifications: Some brokers blame “platform errors” or “liquidity gaps” when SL/TP orders are deactivated during high drawdowns.

Regardless of the excuse, disabling a trader’s risk management tools without prior consent or proper notice is unethical and, under most regulations, illegal.

The Risks of Auto-Disabling SL/TP Orders

Uncontrolled losses:
If your SL is disabled during a volatile move, losses can spiral far beyond what you planned to risk.

Missed profit targets:
Disabled TP orders mean you might miss key exit points, leading to smaller profits or even reversals into losses.

Loss of trust:
A auto-disable of SL/TP during drawdown breaks the fundamental trust between trader and broker.

Increased margin calls:
Without working SLs, accounts can hit margin calls or stop-outs much faster, often wiping out balances entirely.

What to Do If Your SL/TP Is Disabled During a Drawdown

Document the event immediately:
Take screenshots of your trading platform showing the missing SL/TP and any errors or messages displayed.

Contact support urgently:
Request a clear explanation. Ask if this was a platform error, a liquidity issue, or an intentional policy.

Request trade logs:
Most brokers maintain server logs that record order activity. Request these logs to verify what happened.

Escalate the complaint:
If the broker refuses to acknowledge wrongdoing, file a complaint with their regulator. Trusted brokers like Intertrader, AvaTrade, TiBiGlobe, Vantage, and Markets.com operate under authorities like the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC), which require brokers to honour risk management orders.

Withdraw funds and switch brokers:
If your SL and TP are disabled without a valid, documented reason, it is time to move your capital to a platform that values your protection.

How to Avoid This Issue in the Future

Choose well-regulated brokers:
Only trade with brokers licensed by top regulators who enforce strict rules around order execution.

Use VPS hosting:
A Virtual Private Server (VPS) can improve platform stability and ensure your SL/TP commands are sent instantly, reducing the risk of broker-side manipulation.

Monitor trading conditions:
Stay aware of high-impact news events, during which even legitimate brokers may have difficulty executing orders perfectly.

Read broker policies carefully:
Some brokers disclose in fine print that during extreme volatility, SL and TP orders may not be guaranteed. Avoid such brokers if you prioritise risk management.

Check user reviews:
Look for trader complaints about a auto-disable of SL/TP during drawdown to identify brokers that have a history of such practices.

Conclusion

The auto-disable of SL/TP during drawdown is a dangerous practice that compromises your ability to control risk and protect your trading account. Traders must remain vigilant, demand transparency from brokers, and be ready to act swiftly if their risk management tools are interfered with. Always trade with brokers that put client protection first.

Strengthen your trading strategies and learn to manage broker risks effectively by enrolling in our Trading Courses. Equip yourself with the skills to trade securely and confidently today.