broker negative balance protection

1. Negative balance protection in forex trading Forex trading is no easy task. It involves smart work over hard work. With uncertainty in the market situation and frequent price fluctuations in currency pairs, it requires patience and thorough market analysis to make profits. With respect to forex trading, negative balance protection is an important feature that benefits traders. What is negative balance protection in forex? Negative balance protection is a method, through which traders can prevent additional losses in their trading account i.e., you will not be charged more than what you have in your account. Negative balance protection will be provided to an individual trader by the broker. Despite unpredictable ups and downs in the market and huge losses, you do not have to pay the broker any money as you don’t owe him any due to negative balance protection forex. It is highly recommended you choose forex brokers with negative balance protection to prevent additional losses. This feature is provided by most brokers, but not all. When it comes to professional trading, negative balance protection will do no good. The feature is applicable only to individual traders who trade with the help of forex brokers. Example: Let’s say you have $2000 in your trading account. Due to price fluctuations in currency pairs and the market situation you have faced a loss of $2500 due to the leverage. You owe $500 to the broker as your loss exceeded the amount present in your account. But, if you are engaged in trading with brokers with negative balance protection, you do not owe the broker $500. Though this is an amazing measure to save your money, not all brokers provide this. So, before you begin forex trading, it is suggested you find negative balance protection for forex brokers. How can you avoid negative balance? Though losses in forex trading are unavoidable, it can be prevented. Especially, Negative balance can be avoided by following some of the tips given below: Margin call: Margin call is nothing but your forex broker asking you to deposit more amount in your trading account. By doing this, you will have enough balance in your account to face losses; hence the balance will not be going negative. If you are dealing with negative balance protection brokers, then even if the balance goes

2. negative you will not owe the broker any amount more than what you have in your account. Stop-loss: Stop-loss is one of the effective ways to prevent losses and negative balances in trading accounts. Traders can impose stop-loss orders on a particular currency to sell it once the currency reaches a certain price range. This can keep your money secured by preventing unexpected losses due to price fluctuations. You can also set up a stop-loss order to a specific per cent below the actual price. By doing that you can stop your loss to that specific per cent. Negative balance protection is a good measure to prevent your account from going red. The measure is highly beneficial to first-time traders and beginners, as they can avoid major losses.