What is Negative Balance Protection of your trading account?
Negative balance protection means that you can’t lose money than what is in your account. Please note that your entire capital may be in risk. Therefore, you can still lose all your account funds, if you do not set the limits of the loss on your account. So, the customers can/should set personal limits for risk management purposes, which can help to limit losses and maximize profits. Below are the policies which we manage and calculate the negative balance on your trading account.
1) This policy is only applicable to the customers.
2) The customer should maintain the appropriate margin levels in the trading account at all times for the method of risk management.
3) To protect the customers from negative balances, customers are provided with certain margin levels. If the margin level of a customer account is equal to or drops below the percentage, positions will automatically be closed at the current market price. If customer don’t want this happens, they can set their personal limits for risk management purposes, which can help limit losses and maximize profits.
4) In the event there are certain market conditions which may cause a significant “market gap” and thereby making it possible to incur a negative balance while trading, PipsForex shall absorb the negative balance. The customer should be protected against such loss because the purpose of the negative balance protection provides a help in the case of extreme market conditions.