Losses beyond what's in your account

Discussion in 'Forex' started by Sam Mcgee, Feb 21, 2008.

  1. I've read that with a Forex account you're dealing with a lot of leverage and that you can be liable for losses beyond the money that you have in the account. I remember someone saying though, with some Forex companies you'd just lose what's in your account, nothing beyond that.

    I've just opened an account with FXCM for a few thousand dollars to experiment with some risky trading methods. Does anyone know if FXCM would hold me liable for losses beyond what's in my account? I don't mind if I lost everything in the account but I wouldn't want to be liable for more than that.
     
  2. With Forex and Futures you can lose more than your initial investment. Under normal market conditions your broker will most likely take you out before you go negative but under chaotic market conditions, like the ones following 9/11, there may not be any buyers for you to sell your contracts to because the market keeps going limit down. I suspect something like that could happen in the Forex market as well.
     
  3. skepticaltrader

    skepticaltrader Guest

    You'll get a margin call from FXCM and they'll automatically liqudate your position before you lose more than what's in your account.
     
  4. GTS

    GTS

    FXCM Trading Agreement :
    https://secure2.fxcorporate.com/FxtrServlet/?signal=show_trading_agreement

    Any questions?
     
  5. An over the weekend gap could cause a greater loss than the account balance, stops or no stops.
     
  6. I know they liquidated the seats of Duke and Duke at the end of Trading Places when they couldn't pay up at the end of the trading session.
     
  7. Pippi436

    Pippi436

    Some dealers like Oanda explicitly state in their user agreement that you wont be liable for negative balances. There have been incidents where users did end up in the reds, and oanda reset their account to zero (there was a discussion on their forums about that).

    In my opinion, if you trade that near at a margin call, that this is a realistic posibility, you are doing something wrong anyways.

    Also, margin call procedures are often somewhat unpredictable. I have read quite a few forum posts where people thought of a margin call as some sort of 'built in stop loss', with unfavourable results.
     
  8. ssss

    ssss

    Dear Sir

    1.Best of result ,which was observed was 855% from anonymous from Australia per month on capital 3000$
    by FXMC King of the mini -approx 4000 competitors each month

    He started with 150 k GBP/JPY

    You can observe alsov

    http://www.interbankfx.com/Contest/ContestResults.aspx

    this contest have advantage against fxcm king og the mini ,that 250$ of start capital enough ,price money are better as by FXCM

    2. Better make that on paper ...
    for real price (margin capital on account)

    http://www.fxsol.com/contest/test-drive/leader-board.html
    without charge

    http://www.mgforex.com/eng/forex-demo-account/content/forex-demo-contest-benefits.htm

    45$ per month

    www.marketzar.com without charge (with price 300$) or with charge 50$ (with price 1500$)

    3. Best what was by testing by author with real quote paper game

    700% per day 3 operations with margin 1:800 GBP/JPY
    3100% with margin 1:200 GBP/JPY for 15 days .

    But that was related to multiple attempts with loss 100%
     
  9. ssss

    ssss

    Also, margin call procedures are often somewhat unpredictable. I have read quite a few forum posts where people thought of a margin call as some sort of 'built in stop loss', with unfavourable results.
    ################################

    GFT forex offer initial margin 1:400 and liquidation margin
    1:1600 from initial (25% in agreement) ,but all on solely discretion of the broker .

    Demo work with liquidation margin 1:1600 ,but not planned to test real money account


    Your respectfully ....

    P.S. To GTS - thank you .Was before opinion that CFTC related instruments trading is not so secure from legal and technical point of view as SEC related instrument trading .

    Share and options account have SIPC protection ,
    future account not . Refco ,public noted future broker
    dissapeared for 5 days .
     
  10. ssss,

    Do you still have multiple accounts?
     
    #10     Feb 22, 2008