Negative balance protection

Broker Discussion
1

Does your broker provides you with negative balance protection
And is it usefull or necessary even

2

IC Markets, my broker does not offer negative balance protection (NBP). Providing without exception you put on a S/L, only a huge Black Swan event could take you into (NBP).

It happened to me in Jan 2018 and I lost a sixth of my capital in less than one minute, before the S/L eventually kicked in. To explain, you could put on a S/L but if there’s no opposing trader to take it right away, you lose out.

In normal everyday trades, just keep a low risk attitude and you should stay safe. And naturally, if brokers offered a NGB - some do - you’ll pay for it in commission, fees and wider spreads,

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3

Its very rare that you would get any protection from negative balance protection. But its a good idea - like insurance on your car. Its very rare that your car might be involved in an accident, but the costs if it happens can be very destructive.

UK brokers, spreadbetting firms and CFD providers are required by the regulator to include NBP. The cost is almost zero, there was no noticeable trading cost increase between before this regulation was brought in under ESMA rules and after it was brought in.

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4

UK brokers are only permitted to max leverage at 50:1 for long term traders, less for noobs. Probably noobs are looking for more ways to lose all their capital.

But interesting negative cost increase, all the same. Thanks for that info.

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5

I think its safe to choose a broker providing negative balance protection

6

You would find that means you cannot lose more than your deposits, i.e. your capital. Look for a broker that also ensures your trades are cut off when your margin is overreached.

7

Yes, my broker fxview is offering negative balance protection. It is important and absolutely necessary for every trader and @tommor as explained beautifully. You do not expect to get into an accident, but it is always a good idea to insure your car. Same thing applies to trading.

8

ok will look out for that

9

I use Forexchief. offers full negative balance protection. I have never had to wipe my account though, but chat service confirmed this. Also, you;ll love the spreads and execution speed.

10

i have never heard about them though

11

Full Negative Balance Protection?
It is just they have it or not. There is no such thing full nbp, just saying.

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12

Yes, negative balance protection is quite an important thing and it very well helps in managing any further risk. It kind of acts as a stop loss at times. All the brokers I use (Pepperstone, Plus500, Fxview) provide negative balance protection which helps me stay protected from market volatility. This is a necessary feature I would say and before going with a broker, make sure you inquire whether they offer this or not.

13

All those three brokers are no doubt, worth a try. But am a little more bent towards fxview, their spreads are quite low comparatively. What do you say?

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15

There are so many brokers out there. Just have to narrow down the search.

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16

Yes, sir, they have negative balance protection. You happy now? Great!

17

It is obvious they have it lol. It is just that I found the wording bit weird to use. “Full NBP”