Risk-free trade with the help of ESMA? | Forex Factory

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Risk-free trade with the help of ESMA?

  • #1
  • First Post: Edited 4:24pm Aug 5, 2018 11:54am | Edited 4:24pm
I read on the Internet (on a French website) about side effects from the ESMA ruling, in particular reg. the negative balance protection (NBP):
Because losses on an account are limited (balance), but gains are not limited,
traders can open two opposite trades with max leverage in two accounts or at two brokers with NBP (same initial balance).
One would need about 300 pips to blow up the one account, while the other at the same time can gain more -
it is not a zero-sum game anymore.
All there is needed, is a move beyond that threshold level (i.e. big news, highly volatile cross).
Can this work?
Return To Disorder
  • #2
  • Aug 5, 2018 2:42pm Aug 5, 2018 2:42pm
Is this not the same as using a stop loss order?
  • #3
  • Aug 5, 2018 4:26pm Aug 5, 2018 4:26pm
Quoting tradesimply
Is this not the same as using a stop loss order?
Possibly. However, slippage can be a problem in case of stop loss - stop loss is not warranted (at desired price), whereas NBP is.
Return To Disorder
  • #4
  • Aug 5, 2018 4:40pm Aug 5, 2018 4:40pm
Quoting rockit
I read on the Internet (on a French website) about side effects from the ESMA ruling, in particular reg. the negative balance protection (NBP): Because losses on an account are limited (balance), but gains are not limited, traders can open two opposite trades with max leverage in two accounts or at two brokers with NBP (same initial balance). One would need about 300 pips to blow up the one account, while the other at the same time can gain more - it is not a zero-sum game anymore. All there is needed, is a move beyond that threshold level (i.e....
Can you please tell me more , because not understand you. You mean to open 4 opposite (2 per account) pending orders and wait news or what ?
If i understand you ,when balance is 0 at first account trade will be closed and you have 0. For second account will have profit, but it is = lost balance in first account?
  • #5
  • Aug 6, 2018 2:44am Aug 6, 2018 2:44am
Quoting celerator
You mean to open 4 opposite (2 per account) pending orders and wait news or what ? If i understand you ,when balance is 0 at first account trade will be closed and you have 0. For second account will have profit, but it is = lost balance in first account?
Not 4, 2 (either in two accounts of same broker or seperate accounts at two brokers). And because the positions are opposite, one account gains more than the other loses, makes a net gain. However, I see a (possible) problem with the stop out level.
Return To Disorder
  • #6
  • Aug 7, 2018 3:21pm Aug 7, 2018 3:21pm
Quoting rockit
I read on the Internet (on a French website) about side effects from the ESMA ruling, in particular reg. the negative balance protection (NBP): Because losses on an account are limited (balance), but gains are not limited, traders can open two opposite trades with max leverage in two accounts or at two brokers with NBP (same initial balance). One would need about 300 pips to blow up the one account, while the other at the same time can gain more - it is not a zero-sum game anymore. All there is needed, is a move beyond that threshold level (i.e....
Dude... what are you smoking?

There is no such thing as a Risk-Free trade... even if you move your SL to Breakeven. Wake up brother!
Staying in my lane...
  • #7
  • Aug 7, 2018 4:41pm Aug 7, 2018 4:41pm
In the end you will get both accounts stopped out. That's the most likely scenario what's going to happen if you try something like it.
  • #8
  • Aug 7, 2018 5:37pm Aug 7, 2018 5:37pm
Quoting rockit
{quote} Not 4, 2 (either in two accounts of same broker or seperate accounts at two brokers). And because the positions are opposite, one account gains more than the other loses, makes a net gain. However, I see a (possible) problem with the stop out level.
BS. You will never have a 0 in the first account, because of a margin call. You have to maintain LARGER margins by ESMA. So, if you get a margin call, then you have to open SMALLER position next time due to a previous loss.Also before ESMA, to trade a full lot you needed around 550$ in margins. Now you have to have around 3500$. If your broker defaults, you are risking to lose 3500$ of your deposit, instead of 550$. Your risks are increasing by 660%. That's was the game plan of EU: increase banks' liquidity by pumping money out from investors. BOOM! Welcome to European Communism!
When you're not sure Short or Long - toss a coin! Chances are 50% !!!
  • #9
  • May 25, 2022 3:51am May 25, 2022 3:51am
I know that a lot of time has passed since the last post, but I can not create my own topic, so I will write here. I'm very interested in this strategy. I would like to ask if there are any people earning this way? Maybe there is someone willing to exchange experience?
  • #10
  • May 30, 2022 10:39pm May 30, 2022 10:39pm
Esma is the best indicator to trade on forex and binary market. But you should of the martingale strategy which gives you instant and continuous money.
  • #11
  • Last Post: Oct 26, 2022 6:10am Oct 26, 2022 6:10am
Quoting Montrealer
{quote} BS. You will never have a 0 in the first account, because of a margin call. You have to maintain LARGER margins by ESMA. So, if you get a margin call, then you have to open SMALLER position next time due to a previous loss.Also before ESMA, to trade a full lot you needed around 550$ in margins. Now you have to have around 3500$. If your broker defaults, you are risking to lose 3500$ of your deposit, instead of 550$. Your risks are increasing by 660%. That's was the game plan of EU: increase banks' liquidity by pumping money out from paperhelp.nyc....
I'm a bit confused though regarding the early assignment risk and was hoping you could explain.
The p/l calculation he showed us didn't seem to indicate the position would lose money at any moment. So let's say that he was assigned early. Can't he just close out all the position and realize the profit indicated in the calculation he shared?
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