Understanding the “Liquidation Only” Error Message in Trading
The “Liquidation Only” error occurs when a prop firm account fails a trading challenge by exceeding daily loss limits or maximum drawdown. When this happens, traders can only close positions and must check with the prop firm for reset options.
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Traders ask what else causes liquidation-only status, so the guidance now covers the risk limits traders set on NinjaTrader accounts, when those locks lift, and which need support.
The “Liquidation Only” error message can be frustrating for traders who suddenly find they can no longer place new trades. This message typically appears in prop firm accounts that have violated trading rules. Let’s break down why this happens and what you can do about it.
Why Am I Getting a “Liquidation Only” Error?
Prop Firm Accounts That Fail the Challenge
One of the most common reasons for this error is failing a prop firm account challenge. Many traders use prop firm accounts to access capital, but these accounts come with strict rules, including:
• Daily loss limits – If your losses exceed the set limit for the day, trading may be restricted.
• Maximum drawdown – If your total account drawdown exceeds the allowed percentage, your account may be moved to liquidation-only mode.
When a prop firm enforces these rules, traders can only close existing positions—they cannot place new buy or sell orders.
How to Fix It
• Check if you violated the prop firm’s rules by reviewing your trading history.
• Contact the prop firm’s support team to confirm if your account is in liquidation mode.
• Determine if a reset is possible—some firms allow traders to restart the challenge for a fee.
Risk Settings on Your Own NinjaTrader Account
A NinjaTrader Brokerage account can also go liquidation-only when it reaches a Risk Setting its owner chose, such as a daily or weekly loss limit, a profit trigger or a trailing drawdown. Reaching one also closes open positions and cancels working orders1. Low net liquidating value or a margin requirement can cause the same status. A daily limit or trigger lifts at 5:00 PM Central the same day and a weekly one at 5:00 PM Central on the following Sunday, but a trailing drawdown lock lasts until NinjaTrader support unlocks it. On a prop firm account that runs on NinjaTrader Prop, you can set your own Risk Settings, but the firm sets any restrictions on the account, and NinjaTrader support cannot remove or change Risk Settings or restrictions on a prop account, so ask the firm instead.
What Happens If I Ignore the Liquidation-Only Restriction?
If a trader does not close their positions in a liquidation-only account, the prop firm will forcefully close them by the end of the trading session. This could result in:
• Loss of any remaining account balance.
• Disqualification from the challenge or loss of funding.
• Needing to restart the evaluation process from scratch.
Final Thoughts
In a prop firm account, the “Liquidation Only” error usually means a trader has breached a prop firm’s rules. The best way to avoid this restriction is to carefully track daily loss limits and drawdowns. If you receive this message, check with your prop firm to see if you have options to reset or requalify.
