New here, couple of questions

Beginner Questions
1

Hey all I started reading a lot about trading and am looking to get into it. I have opened up a demo account with FXCM and in 3 weeks have turned £50,000 into £65,000 :).

I just wanted to get everyone’s opinion on FXCM as I used it at first due to the mobile app which I love. I tried MT4 but didn’t seem to like the layout etc. as much as FXCM so is it a reasonable website to use for my trading or am I missing out on something.

Also all the websites say ‘you can loose more than your initial deposit’. Is this true, if I were to deposit £1000 and start trading can I loose more than that or only the £1000 that is in the account.

Cheers all

2

Yes its important for you to know that you can lose more than your deposit, you could put £1000 in and if the **** hit the fan you could end up owing them £30,000 etc. You can get brokers who offer negative balance protection which means you cant lose more than you deposit. FXCM recently got hit hard and ended up owing £225,000,000 they then got a bailout so its all a little bit on a tightrope but fxcm were the largest broker and were on the new york stock exchange so that gives them a bit of credibility.

3

The only way a trader can avoid losing more than they deposit is via balanced risk management strategy, risking a maximum that they are ready to lose (via stop- loss)loss protection and lot size selection.

4

So basically I was gonna put in £1000. FXCM seem to do a 100/1 ratio so I was planning on only betting 5% which is £50 or on the 100/1 terms I would buy/sell 5k lots?? Is this right or am I doing the math wrong?

Also when putting on my 5% bet I will have a stop loss ALWAYS of -40 pips (just to being with until I become a more experienced trader)

Is what I have just explained perfectly safe and is it a reasonable idea or a waste of time lol

5

So would you all reccomend FXCM or should I go with someone else. If so who else is better.

Cheers all

6

Obviously the rules regarding negative balances with dealers vary from dealer to dealer. But a wave of negative balance forgiveness went through the industry in January when many accounts went negative on swiss trades. Negative balance protection is among the benefits offered by many market making fx dealers.

-Adrian

7

very good question . for newbies like me ,replies from others are a good eye-openers. thanks to all who have given a good lead to the beginners.

8

You referred to your accounts denominated in GBP, so I’m guessing that you are in the UK, trading with FXCM-UK.

If that is the case, then you are covered for negative balances up to $50,000 (i.e., approx £33,000) provided you are a regular retail trader — meaning that you are not an “eligible contract participant” (i.e., a high-net-worth trader), an eligible counterparty, a professional trader, etc.

The $50,000 negative-balance forgiveness includes events such as the recent SNB debacle.

Here is a brief article from [I]Forex Magnates[/I] —

FXCM UK Updates Negative Balance Policy To Include Only First $50,000

But, don’t just take this article (or any other article) at face value, without doing further due diligence. Consult you broker’s Terms and Conditions. If that doesn’t answer all your questions, contact your broker directly via Live Chat, email, or phone-call.

Proper and complete due diligence is your responsibility. No one else can do it for you.

FXCM is established and reputable.

They offer a platform and charting package (their Trading Station II and MarketScope charts) which are (arguably) the best in the world.

Probably, you will not be disappointed with FXCM.

9

Thanks for that :slight_smile:

10

Min 1st deposit with fxcm is £2k

11

Yes you can loose more that you have and there is a possibility that they will chase you to pay that negative balance, as it happened with some traders. So read over their TOS and follow MM to not get blown up for minutes.

12

Even if you have a stop-loss, that is no guarantee that you will not end up owing a broker a lot of money, take the black thursday swiss franc nightmare, i think a few brokers out there guarantee the stop-loss but most dont.

13

Hmmm that doesnt sound good lol. If i manually went in and closed the trade though surely that would prevent me owing them money?

14

doesnt mean it will close at that price and if u do market order at certain price it can get filled many pips away.

15

How does that work? Sorry i m new and still trying to figure everything out

16

A example would be if you have position over the weekend at times price will open with a gap up or down so your stop wont be closed or if there is big news event and price moving to quick again it wont be closed with the volatility.

maybe someone might be able to explain it better hopefully

17

What happened with the eurchf was that the price fell so quickly everyone was trying to sell but, as there were no buyers, the price fell through the floor, past stop losses. By the time some buyers decided to get some cheap buys, traders had lost 100’s of pips in a few seconds.
It could happen again, I could imagine a huge natural disaster or war/terrorism could cause a sell off in a currency. Perhaps one of the older traders can confirm if/what happened in the past

18

There is much possibility to loose money and still owe the broker. That is why it is important to be well equip and not rush into live trading. Take gradual step to learn forex from the basic to prevent such situation .

19

Wow cabumbo - you are doing well for a newbie!
yes you can lose more than your initial deposit, but this can be avoided if you choose a broker that promises “no negative balances”. There are a few on the market - check them out.

20

Cheers, still a lot of stuff I can’t get my head around. Any recommendations for brokers that offer that security?