From my experience I can say negative balance protection can be a bailout. I remember when I started trading little did I know about the negative balance protection and ended up losing a big chunk of my money. With NBP you are not going to lose more money than what you have invested, and believe me, this is a life saver.
Ya I do agree with you mate, experience wasn't that great with an STP, dropped the idea of using it. Instead found ECN to be a better option. But it wasn’t an ECN account for me until 3 sleepless nights with my lost trades, realised the importance of negative balance protection when I saw my entire investment draining. Using XTB and Fxview’s ECN atm.
What is your budget? If you are new to forex trading I would start with a lower budget and opt for an STP trader. Reasons being i) In general STP brokers don't charge a high amount for opening a trading account. ii) the commissions are low for each trade for STP.
mitchelstrack posted: I am new to trading and have been recommended by a few to possibly consider negative protection with an ECN account. Avoiding STP due to interest clashing (that’s what I heard). Is it actually a help?
Go for ECN and you are good, all my clients copying my trades I also advised to go for ECN.
I would never use a broker that doesn’t offer NBP. There’s this one trade that I so vividly remember in my initial days of trading when I was using a leverage of 30:1 on XM on EURUSD and was hopeful of good returns. The price just suddenly dropped, as opposed to my estimation of prices going in the reverse. Before I could realise what was happening and close my trade, my balance came tumbling down to 0. Had it not been been for the nbp I would have been in a debt of 15000. And I seriously don’t know how in such a scenario one would go about repaying the broker. I just simply decided to always stick to brokers with nbp. Fxview and oanda are other brokers that I’m using who provide this feature.
Negative Balance Protection is ok, but why go for ECN, I would rather suggest trying STP Brokers as they provide more transparency and more competitive pricing for customers. Plus the lot size can be smaller and easily manageable.
I think both STP and ECN have their own advantages and disadvantages. It's up to the client what he/she wants. I have seen successful and happy traders using each type of broker. I am personally using Instaforex for STP account and ECN with Fxview.
ADVERTENCIA DE ALTO RIESGO: El comercio de divisas implica un alto nivel de riesgo que puede no ser adecuado para todos los inversores.
El efecto de apalancamiento crea un riesgo adicional y una exposición a las pérdidas. Antes de decidirse a operar con divisas, considere cuidadosamente sus objetivos de inversión, su nivel de experiencia y su tolerancia al riesgo.
Podría perder una parte o la totalidad de su inversión inicial. No invierta dinero que no puede permitirse perder. Infórmese sobre los riesgos asociados al trading de divisas y pida consejo a un asesor financiero o fiscal independiente si tiene alguna duda.
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