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
  • General Statistics

    • Total Topics
      20,051
    • Total Posts
      88,089
    • Total Members
      69,044
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    CleverMami
    Joined 30/09/22 11:26
  • Posts

    • Hi @beck_l24 Thanks for reaching out,  When trading on a limited risk account you are required to place guaranteed stops on all of your trades. Using a guaranteed stop guarantees your stop level regardless of whether market gapping occurs. In the event of market gapping IG takes on the risk and will fund the slippage to guarantee your level. With this in mind when we perceive the market to be volatile we will increase min stop distances to reflect the level of risk that we are willing to take on in that period. Unfortunately you will not be able to avoid this on your account as it is expected behaviour when there is some volatility.  However you can reach out to helpdesk@ig.com.sg should you wish to enquire about upgrading your account from limited risk to standard. Standard account does not require guaranteed stops.  All the best,  Anda
    • Cisco SystemsInc., Elliott Wave Technical Analysis Cisco Systems Inc.,(CSCO:NASDAQ): Daily Chart, September 30 2022,  CSCOStock Market Analysis: We could be forming wave (iv) and I would expect it to be sideways as wave (ii) was a sharp correction. CSCO Elliott Wave count:  (iv) of {v}. CSCOTrading Strategy:Looking for short off wave (iv) once we get confirmation. CSCOTechnical Indicators:Eventually the 20EMA(red line) 9could act as resistance. TradingLounge Analyst: Alessio Barretta         Cisco Systems Inc.,CSCO: 4-hour Chart, September 30 2022 Cisco Systems Inc.,Elliott Wave Technical Analysis CSCO Stock Market Analysis: We can see we past equality of (i) vs(iii) and now we are facing resistance at the same level. CSCOElliott Wave count:  (iv) of {v}. CSCO Technical Indicators: We are starting to form RSI divergence. CSCOTrading Strategy: Looking for shorts once we have confirmation wave (iv) is completed.
    • Elliott Wave Analysis TradingLounge Daily Chart, 30 September 2022, NEO (NEOUSD) NEOUSD Elliott Wave Technical Analysis Function: Counter trend Mode: Corrective Structure: Zigzag Position: Wave C Direction Next higher Degrees: Wave (5) of Motive Details: The decline of wave((5)) tends to trade below 7.97 and there is an opportunity to hit wave 5 price target equal to wave 1 at 2.25 level. Wave Cancel invalid Level: 12.62 NEO (NEOUSD) Trading Strategy: Bear Market Efforts The price tends to trade below the 7.97 level, and it This could be an opportunity to open a short position.but must not return above 9.64 NEO (NEOUSD)Technical Indicators: The price is above the MA200, and MA50 line. MACD is above the zero line momentum is bullish. TradingLounge Analyst: Kittiampon Somboonsod         Elliott Wave Analysis TradingLounge 4H Chart, 30 September 2022, NEO (NEOUSD) NEOUSD Elliott Wave Technical Analysis Function: Follow trend Mode: Motive Structure: Impulse Position: Wave 5 Direction Next higher Degrees: Wave (5) of C Details: the decline of wave((5)) tends to trade below 7.97 and there is an opportunity to hit wave 5 price target equal to wave 1 at 2.25 level. Wave Cancel invalid Level: 12.62 NEO (NEOUSD) Trading Strategy: Bear Market Efforts The price tends to trade below the 7.97 level, and it This could be an opportunity to open a short position.but must not return above 9.64 NEO (NEOUSD)Technical Indicators: The price is above the MA200, and MA50 line. momentum is bullish.
×
×
  • Create New...