Forex - Losses can exceed you initial deposit - what does this mean? also if I have a stop will that exceed my initial deposit?
- zman492Lv 73 years ago
<<<Losses can exceed you initial deposit - what does this mean?>>>
If you buy a futures contract, sell a futures contract, or sell an option on a futures contract, you may lose more money than you deposited into your account before the trade. If that happens you will be required to deposit additional money into the account to cover the loss,
<<<if I have a stop will that exceed my initial deposit? >>>
A stop loss order, at an appropriate level, will usually limit the amount of a loss, but not always. A stop loss order does not protect you against a gap in the price of the underlying security.
- RichardLv 73 years ago
You are betting on which way the currency exchange rates will move. You can make sudden wins or losses and have no control over how large those might be, whatever stop order you have put in place.
- Anonymous3 years ago
When you place a Forex trade you are essentially "betting" the value of currency A will go up (or down) against currency B....
If you are wrong, you are still responsible for the difference.....which may well DWARF your initial deposit.....and land you in Court if you do not (or "cannot") pay up...
It's a sucker's game, basically no different than betting on a coin toss (and paying for the "privilege", LOL!)