Risk more than initial deposit?

Hello everyone, I’m somewhat new to this, I’ve practiced using a training account and now I want to put down a small deposit (�400) and open a real mini account, however, when I tried to make the account, I was told this

‘‘I understand that leveraged Foreign Exchange trading can involve the risk of loss beyond my initial deposit, and may not be suitable for me. I have read and understood all the information provided on this website, and I would like to proceed with my application.’’

This is from Forex | Forex Trading | Currency Trading

I asked the help line and their response was

''Erez: You cannot lose more than you put in

Erez: This is our policy.

you: Why does it say that when I try to open an account then?

Erez: I am uncertain, and I do apologize. I am addressing this issue now and we will investigate it.’’

Do I trust it?

Thanks

I don’t know anything about the company, myself I would never sign/agree to anything in writing that was contrary to what a rep said. The written contract/agreement always trumps whatever anyone said.

With most reputable brokers you can’t lose more than you put in. And they will margin call you before your account goes to 0 anyway. It would be hard for them to collect anyhow, they only have the money you’ve deposted with them.

this is just to let you know, that you can loose money as well, down to your margin.
this is a risk disclaimer to make you understand that your money is at risk down to the margin call if you make a wrong decision, but if you make the right decision you can gain of course.

So, if I put in �500, I cannot lose more than �500?

Thanks for the help

One more question, I tried signing up for ‘Oanda’ and they need me to send them photocopys of my passport, this seems a bit weird, is this normal and if so, why do they do this?

Theoretically, you could lose more than your deposit. For instance, if your stop loss is set at 1.0000 and a nuclear war breaks out resulting in price gapping directly from 1.0001 down to 0.8000 with no trades taking place between these two values.
What would happen then is that your stop would take you out at the first available price, 0.8000, even though you set it to get you out at 1.0000.

So, yes, it’s possible but extremely unlikely.

The other Q: yes, it’s normal for them to ask you for a passport scan. I use Oanda and they have a pretty photo of my blue eyes :smiley:

Same with IBFX when I opened an account there. It’s normal procedure, probably their way of trying to prevent ID fraud, money laundering etc.

I understand your hesitation, but as far as I know, it’s standard procedure.

ahhhh, I understand very well now, thank you very much.

This would depend on your brokers policy outlined in the trading agreement. It should be clearly stated whether you are responsible for a debit balance.

And requesting a copy of your ID such as passport is normal practice due the customer identification program required by the NFA. NFA Manual / Rules