The benefits of negative balance protection.

Discussion in 'For novice traders' started by Francmorio, Dec 28, 2017.

  1. Francmorio

    Francmorio Member

    In an increasingly volatile forex market, this is one of the most important questions traders can ask. Of course, we are referring to negative balance protection (also termed margin call ), which can prevent a trader from entering into debt.

    Unfortunately, not every retail forex broker offers negative balance protection. For the inexperienced trader, the lack of margin call can mean the difference between losing money and going into debt. This is a subtle, yet crucial difference. In forex trading, you may be able to tolerate losing money you can afford to lose (after all, there’s no such thing as a perfect trader who wins all the time). However, going into debt is never acceptable, regardless of how much experience you have.

    Negative balance protection ensures that traders who possess losing positions don’t enter into a negative balance in their forex trading account. If you find yourself in a bad trade and are losing money fast, a margin call can save you from going into debt. Simply put, a margin call automatically closes your open losing positions.
  2. andengireng

    andengireng Member

    NEGATIVE BALANCE PROTECTION is the adjustment made automatically on account balance to zero if your balance loses to negative after a stop out. Highly leveraged Forex accounts that potentially have a loss risk exceeding the funds invested. However, with a broker that offers a negative balance protection, the trader will never loss more than his deposit.
  3. broforex

    broforex Member

    Many traders wonder, can the trading account balance on the forex broker be negative? Trading with leverage does allow a situation where the trader "owes" more than the funds he has deposited.
  4. Tengkorakfx

    Tengkorakfx Member

    Good thing that FreshForex has this feature, we don't need to worry about reduced balance after making another deposit to our trading account.
  5. broforex

    broforex Member

    Forex brokers generally have a negative balance protection policy, or negative balance protection. This feature allows your account balance to be reset to 0 when the amount becomes negative due to being hit by fundamentally unexpected news. Thus, you do not need to worry about being indebted to the broker if at any time your position loses after there are fundamental announcements that surprise the market.

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