I realise some accounts have negative account balance protection but I am curious to know when do negative account balances occur?
If a trader:
- doesn’t hold positions over the weekend,
- doesn’t hold positions at rollover,
- doesn’t hold positions at major scheduled news events,
- and employs stop orders,
when is an account at risk of a negative balance?
I assume it’s only when liquidity suddenly and unexpectedly dries up, such as if a surprise news event enters the market, and prices move aggressively against you causing significant slippage.
Is that correct, or are there other causes of negative account balances?