Experiencing a negative balance in your trading account can be concerning. This article explains why this might happen and what you should know about our protection measures.
How Our Margin Protection System Works
FXTRADING.com has implemented an automated protection system to help prevent negative balances:
Early Warning: The system alerts you when your equity falls below 100% of your used margin (margin level falls below 100%)
Automatic Stop-Out: A computerized liquidation process begins when your margin level drops to 50%
Position Closing Order: The system closes positions starting with the largest losing positions until your margin level exceeds 100%
Why Negative Balances Can Still Occur
Despite these protective measures, your account may occasionally experience a negative balance due to:
Extreme Market Volatility: During exceptionally fast market movements, prices may gap significantly between trades
Overnight Gaps: Major price jumps can occur between market close and open, particularly after weekends or major news events
Liquidity Issues: During highly volatile periods, the execution price may differ from the requested price
Delayed Execution: In extremely volatile conditions, there might be delays in the stop-out mechanism's activation
What Happens If Your Account Goes Negative
If your account balance becomes negative due to market conditions beyond your control, FXTRADING.com offers Negative Balance Write Off protection for qualifying accounts, subject to our terms and conditions.
Preventative Measures You Can Take
To minimize the risk of experiencing a negative balance:
Use appropriate stop-loss orders on all positions
Avoid overleveraging your account
Maintain adequate margin levels, especially before weekends and major announcements
Regularly monitor your positions and account status
Consider reducing position sizes during potentially volatile market periods
For more information about our margin requirements or Negative Balance Write Off policy, please contact our Service Hub or use Live Chat in your Client Portal.