Hi guys, I just wanted to find out, is it possible to lose more than your deposit in forex?
it is if you use a broker that doesn’t offer negative balance protection
its very, very rare, though, and happens only when there’s some disaster like the “Swissie debacle” of a couple of years ago, for example if a country’s central bank suddenly interferes majorly with their currency’s exchange rates
whether a forex broker would actually pursue (sue) you for the extra funds is a different question, though, and that depends on the circumstances, the amount of money involved, how they’re regulated, which country each party is in, and other factors
not really possible with a STP broker
Yes, its possible to losing money more than a deposit, if trader choose high leverage like as 1:1000 and they have small capital and using lowest lot size, when price movement very rapidly and order can’t be closed automatically because freeze data, hence will possible after order closed will get negative balance, I have experience for this condition on InstaForex broker, which my account get negative balance
Silly question
Will SL got frozen too? I mean will my broker will late close my order?
Yes, it could possible if SL get frozen by rapid movement, but this rarely occurred, there are certain trader ever share if SL not hit although price already crossing SL, I think this is also depending with trading server quality,
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Yes. Leverage and margin magnify your wins - and your losses. What many commenters here are describing is slippage - that’s when a price blasts through your stop loss and it fails to execute on time or at all. If you don’t have sufficient margin to support your trade, you’ll get margin called. Another great way to be margin called is to not have a stop loss at all and the trade goes against you very fast and very significantly. When that happens, you have to add money to your account to cover the margin call and all open trades will be closed as well. A margin call is is the equivalent of Chernobyl or Fukishima on your account.
This is why you should use stop losses and never risk more than 1% of your account on a position. BabyPips has a calculator to set your position size based on risk %, your account balance, your stop loss size, and the pair being traded. The bigger your stop loss, the smaller your position size has to be. You don’t want your stops too wide, because you’re exposing yourself to large losses, but too tight a stop smothers your trades and leads to chopping up your account - “death by a thousand cuts.”
You also need to watch your trades. I’m trading demos, but I’ve gotten quite a few losses because I had to to go to the bathroom, answer a phone or something else, the trade went against me and I was completely oblivious to it. I don’t like swing and position trading for this reason. You can’t watch trades overnight while you sleep and anything can happen - very fast - while you’re out for the night.
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It is not basically possible for the forex traders. However, as a trader you should first try to acquire good trading knowledge otherwise your trading journey can be very much difficult here. So, try to complete the lessons of Babypips. I think it will definitely help you to solve many major and minor trading related beginners’ questions.
false - don’t be fooled by those letters “STP”, which signify very little, regarding retail forex brokers
this forum (and every other trading forum on the web) contains many threads listing all the disaster stories of people who have learned to their great cost how mistaken your belief is
Yes, if you trade on leverage and your broker does not offer negative balance protection
Many people loses their all the money they had in their account. Loss of money depends upon nature of the account and also on which broker you are trading. There are many platforms where you can lose your all the money and also there are some chances that your account goes towards negative.
Not as much; maybe it’ll be few cents. But, it depends on your broker’s type mainly.
Yes it is possible to lose more than deposit you made. This thing depends on your broker that how much negative payment allows your broker. Your account will be goes negative and when you again made a deposit on that account than this money is taken.
Yes, it is possible to lose more than deposit due to high leverage while trading. That’s why the stop loss order is placed at the time of trading to avoid such situations.
High leverage always contains high risk , so before trading with high leverage it is more appropriate to ensure real risk managing approach , otherwise you can fall a great trouble while trading.
Thanks for all the feedback once again. I have obtained enough knowledge and understanding.
yes definitely you can lose money more than deposit if you are using high leverage and your broker is not providing negative balance protection. Though it happens very rarely.