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"Losses can exceed deposits"

  • #1
  • First Post: Oct 6, 2015 10:14am Oct 6, 2015 10:14am
I've been away from FX about a year.. I don't remember ever seeing this before on a Forex broker, now it seems to be commonplace - is this a reaction to the SNB event ?

What happened back then to accounts that blew past a 0 balance?

What will happen now if your losses exceed deposits?
  • #2
  • Oct 6, 2015 12:48pm Oct 6, 2015 12:48pm
Quoting ycomp
I've been away from FX about a year.. I don't remember ever seeing this before on a Forex broker, now it seems to be commonplace - is this a reaction to the SNB event ? What happened back then to accounts that blew past a 0 balance? What will happen now if your losses exceed deposits?
It always existed. there are two kind of brokers the one who have negative balace protection and the ones that don't.....If you go negative and your broker grant you negative balance protection nothing will happen, otherwise you should pay the negative balance....
Buy at the Low, Sell at the High You make money by waiting not by trading.
  • #3
  • Oct 6, 2015 3:45pm Oct 6, 2015 3:45pm
Quoting ycomp
I don't remember ever seeing this before on a Forex broker

It's been around for a long time.

We live in times of ever-increasing compliance regulations.

More and more countries and regulatory authorities are requiring such warnings to be increasingly clearly and prominently displayed, these days.


Quoting ycomp
What will happen now if your losses exceed deposits?

It varies from broker to broker, and from country to country. Recent events and the general investment/trading atmosphere are making it ever more important to avoid lightly-regulated offshore brokers and counterparty market-makers, as black swans are apparently becoming a little more grey.
  • #4
  • Oct 6, 2015 11:58pm Oct 6, 2015 11:58pm
Quoting ycomp
I've been away from FX about a year.. I don't remember ever seeing this before on a Forex broker, now it seems to be commonplace - is this a reaction to the SNB event ? What happened back then to accounts that blew past a 0 balance? What will happen now if your losses exceed deposits?
I entered the forex arena in 2004 and saw a lot of things but the most common mistake is ignorance. What I mean is traders take things for granted and they just don't see things unless something happen and they are forced to become aware of it. Every forex broker are equipped with legal shields and all of this is included in the Terms of Service or Agreement that you "agreed upon" prior to using the broker's service. If you look at it carefully you will find a clause which will tell you that "you might lose part or whole or more than what you have in your trading account" or something along that line.

Even on their website (broker's website) you can find the disclaimer mentioning that thing. So it's nothing new at all. It's just brokers are now want their clients to be fully aware of this before they even open a live account.
Different/opposing ideas will make us learn and understand many things.
  • #5
  • Oct 7, 2015 3:37am Oct 7, 2015 3:37am
Quoting ycomp
I've been away from FX about a year.. I don't remember ever seeing this before on a Forex broker, now it seems to be commonplace - is this a reaction to the SNB event ? What happened back then to accounts that blew past a 0 balance? What will happen now if your losses exceed deposits?
The negative balance may occur with any broker. This is due to Price Gaps and no matter it's the stock market or forex or CFD. What matters is that the negative balance will not protect you no stop loss or stop out. Smart trader should read the public offer with the broker. Usually it says that the trader can lose no more than the size of his balance. These all losses associated with a negative balance compensated by the broker.
Read the agreement and success in trading.
  • #6
  • Last Post: Oct 7, 2015 8:18am Oct 7, 2015 8:18am
Sometimes when i do news trading this happens, but that's usually to very low level unless i am of course facing gap. Most brokers will set the balance zero when this happens, so we can begin again.
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