Jump to content

FX trade losses exceeding deposits


Recommended Posts

Pardon me as a newbie trying to understand the risks involved, I fear the worst case scenario ie losses exceeding deposits.
What other scenarios this can happen? Has this ever happened in IG forex CFD or any forex trading platform?  Heard about the heartbreaking story of a rookie trader who racked up $700K in debt in his Robinhood account.

Here's my example:
Long EUR/USD Mini (10,000) @ 1.1251 
Size = 1 lot/contract
Deposit = SGD 1,500
Margin Required = SGD 784.78 (USD 562.60) -- Leverage 1:20

Based on my demo trading :

- IG will not allow me to place order if I have insufficient funds. 
   In this case, I cannot buy more than 1 contract as it will exceed my deposit. So I can only buy 1 contract to enter the trade with SGD 784.78 as margin.
- Setting my stop loss 30 pips away, which is risking 2% of my deposit. IG set margin required to SGD 277.28.
  If stop loss is hit, I lose 2% of my deposit.

What I understand if I don't set a stop loss and the market goes against my favor, I will get a margin call if my account balance doesn't cover the margin requirement due to losses resulting in IG closing my position.

The worst scenario I could think of is the position is left open with no stop loss and no margin call when it is losing more than 1000 pips!!! which is more than my deposit.


 

  • Like 1
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Many thanks for the clarification  Can I ask if more equity options would be available to trading via the site, on the horizon? Yes, I am referring to the spread bet account, where gains accumulated would not incur tax requirements or returns.  🙂    
    • I've gone through its white paper & discovered it has good prospects, tho the price is down atm which is a good moment to DCA to hodl to the moon on the platform you mentioned.  
    • As the world becomes increasingly reliant on information, crypto and blockchain projects are shifting their focus towards the information economy. This project revolves around the creation, distribution, and utilization of information and technology, where knowledge and information are valuable assets driving wealth and growth. $NESS token enters the scene as a cryptocurrency designed to facilitate connections within this information economy. Furthermore, $NESS boasts a unique reward system that incentivizes active user participation, collaboration, and contributions to the underlying platform's success. To empower users, NessLabs offers online courses promoting mindful productivity and sustainable creativity. $NESS is expected to be listed on Bitget once sufficient liquidity is achieved. Users who deposit $NESS will have an opportunity to earn passively.  
×
×
  • Create New...
us