Negative account balance protection ?

[EURUSD]

In theory, any good brokerage should give you a margin call before you go negative. Most margin call agreements are structure to leave at least a small positive balance. Of course, a big spike or a price gap over a weekend could wreck your account and leave you negative if you were getting close to a margin call.

If you were trading correctly, you should never use so much of your available margin that there's any chance of a margin call. Proper risk management involves not only limiting the total percentage of your account risked per trade, but also the total risked at any one time.

I think you're right. It is impossible to trade in negative balance because your account will face Margin Call before it is negative. But some brokers gave bonus deposit which can hold position more than your account. Example : there is 30% deposit bonus so if you deposited $100 then you got $130 in your account but the bonus could be used to hold floating condition only and it is unable to be withdrawn.

 

[Pharaoh]

Most brokers won't let the bonus be used to cover going negative. This leads many traders who didn't fully read and/or understand the terms to over-trade their accounts and end up giving themselves margin calls.

 

[bigdolly]

Most brokers won't let the bonus be used to cover going negative. This leads many traders who didn't fully read and/or understand the terms to over-trade their accounts and end up giving themselves margin calls.

Having bonus on your account doesn't bind your real trading to go along with exclusively bonus funds. It befits a trading situation with high odds&insufficient trader's capital, where additional "on demand" margin is offered to make more profits from a trade. From the other side leverage and credit funds put additional risk on your own capital what in unfavorable market movement will lead to skyrocketed losses. Bonus has it's own subtleties of use before advancing closer to this subject take a stock on leverage properties, it's pros and cons.
Regarding NBP, some broker like mine Hotforex done it in a good will. I doubt you'll spot any "NBP" clause in their ToS as in multiplied risk environment any protection, recuperation and similar features even offered to one trader may simply lead to a broker bankruptcy (as in case with CHF event). So it's pointless to buzz around this subject I guess.

 

[Vo32ss]

Yeah, and then they'll catch up with you and pay you back for your loss. Stop believing in fairy tales - if you lost - you lost, if you earned - all yours, but there are no exceptions.

 

[Danuta]

In order to secure your funds in the best possible way, I think it is necessary to choose a forex broker whose terms and conditions include a "Negative Balance Protection". This means that the stop out level on account is in place to help ensure you do not lose more money than your deposit and your account will be brought to a zero balance if it goes into negative as a result of trading activity.