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Have anyone analized the risk of Negative accounts due to high FX volatility
theodoros1

Biedrs kopš Jan 24, 2015  24 ieraksti theodoros1 Jan 25 2015 at 07:52
Hi Guys,


When I started trading FX I thought always that my worst case scenario is to loose 100% of my capital. Brokers should close positions immediately if losses are higher than your maintainace margin. But after the Eur.CHF case I realized ( thanks god I was not trading it ) that many people landed with huge negative accounts.

If your account can turn negative your risk is unlimited. Think that a Long 100k Eur.CHF position covered by 2,5k Cash ( 1:40) could create you a damage of 40k or 15 times your capital.

So here is my questions

1. How can you protect your self SL orders seems not to worked in the EUR.CHF drop.
2. What's the legal background on the case. Is the broker not responsible to close the position before entering negative territory ?
3. Is there an insurance covering this trade damages ?

Thanks in advance. I assume after the Eur.CHF issue trading with FX raised much higher considerations.





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