How much can I loose?

[Vatslav]

Hi all.
First of all, thank you very much for this great website and forum...
Sorry for my English, but I hope you will understand my question...

I am a total beginner concerning forex trading, and there is one thing I am very confused about. And that is how much money I can really loose.
Everywhere I go and read about daytrading/forex trading, I read the same thing "There is a huge risk involved in daytrading, blah, blah"

Now, let's say I open an account and deposit 5.000$. Let's also say that I don't use stop/loss, or use it wrong when I trade.....
Is 5.000$ the maximum ammount I can loose if everything goes wrong? Or can I get in debt for the rest of my life?
I hope you understand my question.

Thanks a lot in advance.

Regards,
Vatslav.

[rhodytrader]

Many brokers will automatically close out your positions if your account equity falls below the required margin for your position(s). That means while technically you could lose all of your initial investment, and potentially more in some kind of catostrophic event, it is very very unlikely to happen.

You need to be aware of how your broker handles those things, though. If they don't automatically close you out you could get yourself in to real trouble.

[Vatslav]

Thanks for the fast reply Rhodytrader.

So basically if the broker has the so called "Margin Call", then I don't have to fear anything, except my own investment right?

[rhodytrader]

It's not a margin call. That's when your broker tells you to put more money in your account or they will close your trades. This is not the same as just doing it automatically when your equity falls below the margin requirement. Make sure you are clear on your broker's policy. It can make a big difference.

In the case of automatic closure you are going to be safe in most cases. Actually, you really won't lose your whole deposit because the broker would get you out before that happens.

Things can happen, though. If there is some really dramatic happening over a weekend, for example, the market could gap against you and cause a loss of more than your account value simply due to the fact that your broker wouldn't be able to close your position(s) out where they normally would.

[Vatslav]

Thanks again Rhodytrader, I really appreciate

Btw, great site you have there

[tymen1]

Excellent answer Rhodytrader

Kind regards, Tymen Wortel, Perth, Western Australia.