Negative balance protection refers to broker commitment to prevent negative balance from occurring on client's trading account. Which one can we call as forex brokers with negative balance protection?
Following the Swiss National Bank's removal of the Euro peg on January 15th, 2015, many traders suffered from negative balances. Some brokers decided to forgive their client's debts, but others sought payments as they lost a substantial amount of funds in the event later known as Black Thursday. Since then, traders have realized the value of brokers with negative balance protection.
Leverage trading allows negative balance to occur, because traders could owe more than the amount available in their balances. From this perspective, worries over a negative balance on the Forex trading account make sense.
What Is Negative Balance Protection?
Negative balance protection refers to the broker's commitment to prevent negative balance on the client's trading account by implementing certain Margin Call levels, preventing client balances from dropping below zero, or the broker's commitment to pardon negative balance. Such a clause can also reassure us that the broker has sufficient capital and a proper handle on risk management. Because of that, some brokers advertised themselves as having negative balance protection as an additional advantage. At the same time, we usually can find such clauses within the broker's terms and conditions.
How to Identify Forex Brokers with Negative Balance Protection?
Generally, forex brokers pardon negative balances; without saying so explicitly, we have no guarantee over what they will do if it happens. Therefore, it is safer to assume that forex brokers with negative balance protection are the ones who have written that clause in their broker-client agreement. In light of that, here is a list of some brokers that have pledged negative balance protection for their clients.
ThinkMarkets
| 💼 Regulation | ASIC, FCA, FSA (Japan), FSCA, FSA (Seychelles), CySEC |
| ⭐ Rating | |
| ⚖ Max Leverage | 1:500 |
One of Australia's top brokers, ThinkMarkets, provides a sophisticated online trading facility with a license from the Australian Securities and Investments Commission (ASIC). Thus, client funds are held in segregated accounts. It was established in 2010 as a typical ECN/STP broker that facilitates trading on various financial instruments, from forex pairs to indices and commodities CFD. An account can be opened in ThinkMarkets with a minimum deposit of $250, and traders can access up to 1:500 leverage.
Aside from guaranteeing negative balance protection, ThinkMarkets also promises low latency and fast execution, regardless if you trade manually or with autotrading. It makes sense as ThinkMarkets server reportedly is in the same location as their liquidity providers, so it shall give you a substantial advantage. The Melbourne-based forex broker also offers a free forex VPS for automated traders who deposited at least $2,500 of funds.
As a multi-asset online brokerage, ThinkMarkets present a wide range of trading assets starting from Forex to Precious Metals, Commodities, Indices, Shares, and Cryptocurrencies. The Australian-based broker is established in 2010 and has since opened additional headquarters in London and regional offices throughout Asia-Pacific, Middle East, North Africa, Europe, and South America.
Along with its history operation, ThinkMarkets has been awarded and recognized many times in various aspects. Most recently, they won the Best Value Broker in Asia at the 2020 Global Forex Awards.
Average FX spreads for traders opening an account in ThinkMarkets start from 1.2 pips for the standard account, while ThinkZero provides the best trading experience with 0.1 pips spread. Still, traders may need to consider that ThinkZero applies commission from $3.5 per side for every 1000,000 trading volumes.
As a global online brokerage, ThinkMarkets operates under various financial regulatory institutions. For example, ThinkMarkets Australia is managed by TF Global Markets (Aust) Limited and is licensed by the Australian Financial Services as well as the Australian Securities and Investment Commission (ASIC) with ABN: 69158361561. ThinkMarkets UK is registered under the Financial Conduct Authority (FCA) by the company name of TF Global Markets (UK) Limited (number: 09042646).
ThinkMarkets consistently try to improve their trading environments with various advanced products. Automatic trading fans are provided with free VPS Hosting, while passionate traders who'd like to experience beyond MetaQuote platforms can try ThinkMarkets' proprietary platform called ThinkTrader.
The trading platform is available on 3 different interfaces specifically designed for Web Desktop, Tablet, and Mobile displays. Furthermore, customized tools such as 80+ drawing tools and more than 125 indicators for technical analysis accessible even through Mobile screens would certainly provide a brand new trading on-the-go experience.
As far as market updates go, trading in ThinkMarkets would be accompanied with news from FX Wire Pro that is known for its strict policy toward upholding objective journalism and delivering critical, trusted information in real-time. Information segments covered by FX Wire Pro include Economic Commentary, Technical-level Reports, Currency and Commodities, Central Bank Bulletins, Energies and metals, together with Event-driven Flashes.
For payment methods, ThinkMarkets offer the gateway via bank transfer, credit card (Visa and MasterCard), Skrill, Neteller, POLi internet banking, BPay, and Bitcoin wallet.
All in all, it is safe to say that for a company that started business since 2010, ThinkMarkets is an accomplished broker in terms of legal standing and innovation in trading technology. As an additional safety assurance for traders, this broker underlines its commitment to provide a $1 million insurance protection program which is made possible by ThinkMarkets' insurance policy with Lloyd's of London that protects clients' funds for up to $1 million in the unlikely event of insolvency.
FxPro
| ⌛ Established | 2006 |
| 💲 Min Deposit | $100 |
| ⚖ Max Leverage | 1:1000 |
Authorized and regulated by CySEC and UK FCA, FxPro has been in the business of providing forex trading services since 2006. They are known for their relatively low spreads and good customer service. Add that with negative balance protection, and you will find that many traders have moved to join FxPro due to these advantages.
To open an account with FxPro, a trader must deposit a minimum of $500 in either USD, EUR, GBP, JPY, or CHF. Later, a trader can improve their financials by manually trading several assets with PAMM or utilizing algotrading. They put the highlight on technology that they have even built a set of tools specifically to support mobile trading and in the shape of extensions for browsers.
Ever since its establishment in 2006, FxPro has successfully expanded to serve retail and institutional clients in more than 170 countries. Their head office is in London, UK.
FxPro UK Limited is authorized and regulated by the FCA since 2010. Meanwhile, other subsidiaries such as FxPro Financial Services Limited is authorized and regulated by CySEC since 2007 and the FSCA since 2015. Because of that, traders do not need to worry again about their funds safety. As a strong proponent of transparency, it established the highest standards of safety for clients' funds, as the company chooses to keep the funds in major international banks, fully segregated from the company's funds.
They always try to provide transparent and ethical practices across the global trading industry. In 2018, 74.65% of market orders were executed at the requested price while 12.8% of the client's orders were executed with positive slippage. Also, only 1.4% of all instant orders received a requote with 0.72% of them receiving better price when executed.
The total number of trades in FxPro has increased from year to year. In 2018, the number of trades achieves 53.6 million. Based on trust from their clients, FxPro received awards as Most Trusted Forex Brand UK 2017 by Global Brands Magazine. Besides, they became the first broker to sponsor an F1 team in 2008. There are around 60 UK and International Awards which had been achieved by FxPro.
They are committed to create a dynamic environment that equips traders with all the necessary tools for their trading experience. Opening an account in FxPro grants access to more than 250 CFDs on 6 asset types, including forex, shares, spot indices, futures, spot metals, and spot energies. They want to provide their clients with access to top-tier liquidity and advanced trade execution with no dealing desk intervention. The average execution time is less than 11.06 millisecond with up to 7,000 orders executed per second. Those advantages enable traders to benefit from tight spreads and competitive pricing.
Furthermore, FxPro is recognized as an innovative broker. The company allows its clients to enjoy a wide range of trading platforms, such as MetaTrader 4, MetaTrader 5, cTrader, and FxPro Edge. Web-based versions and mobile applications are also available so that traders can access financial markets at any time and anywhere.
Traders can choose platforms according to their needs. Fans of MT4 is provided with instant execution and easy-to-use trading platform. In this account, leverage is up to 1:500 and spreads start from 1.6 pips without commissions.
If traders want to get experience with more modern technology, traders should choose FxPro MT5 Accounts. In this account, spreads start from 1.5 and leverage is up to 1:500 without commissions.
Another type of accounts is FxPro cTrader. It is suitable for traders who give priority to the speed of execution with the most restrictive spreads compared to other account types'. FxPro cTrader is a powerful trading platform offering the best available bid and ask prices, with orders filled in just milliseconds. The platform also provides Market Depth and trading analysis tools. In this account, spreads start only from 0.3 pips. But, traders have to pay commissions $45 per $1 million traded (upon opening and closing a position) in forex and metals.
The key difference between MetaTrader 4, MetaTrader 5, and cTrader lies in the range of the CFD products that are available. The MT4 platform gives traders a chance to open positions on all of the 6 asset classes, whereas the MT5 doesn't support shares, and cTrader doesn't support shares and futures.
Besides 3 types of platforms above, trading in FxPro also enables access to FxPro Edge. This platform offers clients a new way to trade the markets in the form of spreads betting.
Each broker has pros and cons, and FxPro is not an exception. Aside from the advantages as explained before, FxPro has a high minimum deposit. Also, there are not many types of payment and withdrawal methods available at FxPro. Some types of methods even require traders to pay fees. However, it is still important to note that clients can trade forex, shares, indices, metals, and energies, with limited risk account at no additional cost in Fxpro
Regardless of the advantages and disadvantages, FxPro can be traders' choice as one of the best brokers with sophisticated technology. The company is suitable for traders prepared to trade with funds starting from $500.
Pepperstone
| ⌛ Established | 2010 |
| 💲 Min Deposit | $0 |
| ⚖ Max Leverage | 1:400 |
As one of Australia's top brokers, Pepperstone offers negative balance protection, razor-thin interbank spreads, and STP/ECN processing. An account can be funded with a minimum amount of $200 in AUD, USD, NZD, CHF, GBP, EUR, JPY, SGD, or HKD.
Pepperstone is regulated and licensed by ASIC and welcomes all trading styles commonly used among traders, such as hedging, scalping, and expert advisor. Still, compared to ThinkMarkets and FxPro, which offer leverage up to 1:500, Pepperstone can only give slightly lower leverage up to 1:400.
Pepperstone was founded in 2010 by a team of experienced traders with a shared commitment to improve the world of online trading. Based in Melbourne, Australia, they grew to become one of the largest forex brokers in the world. If traders want to find a broker that provides low spreads, fast execution, and award-winning support, then the answer is Pepperstone.
Pepperstone has a strong legality guarantee because it has been licensed by the Australian regulator ASIC and FCA. Traders' funds can be deposited in segregated accounts at top Australian banks, one of which is the National Australia Bank (NAB). Therefore, the safety of funds is not a concern if a trader chooses to open an account in Pepperstone.
They succeeded in collaborating with 23 top banks to bring Bid to investors instantly via optical fiber. This allows all orders to be executed 100 percent automatically with low latency up to 0.05 milliseconds, without dealing desk intervention and requotes, as well as with super low trading costs.
Trusted by over 73,000 traders around the world, Pepperstone processes an average of USD12.55 billion of trading volumes every day. Because of that, they have many awards such as:
- The Best Global Forex ECN Broker 2019 and Best Forex Trading Support-Europe
- Best Australian Broker and Best Trading Platform 2018 by Compareforexbrokers.com
- Best Forex ECN Broker, Best Forex Trading Support, and Best Forex Trading Conditions by UK Forex Awards 2018
With the many rewards gained, Pepperstone hopes to attract more and more traders from all over the world. The rising performance of Pepperstone is not only due to the super-tight spreads and fast execution that it provides, but also because many traders are interested in trading with deposits in currencies other than US Dollars.
For this reason, Pepperstone is one of the most market-responsive brokers because it is willing to accept deposits in 10 currencies, which include AUD, USD, EUR, CAD, GBP, CHF, JPY, NZD, SGD, and HKD.
Trading in Pepperstone would allow traders to choose between 11 trading platforms: MT4 for desktop, MT4 Mac, MT4 iPhone, MT4 Android, MT4 iPad/Tablet, MT5, WebTrader, cTrader WebTrader, cTrader cAlgo, and cTrader Mobile. The choice of trading platforms may seem confusing to novice traders, but actually, it is very useful because it has fast execution.
When trading forex, traders can enjoy raw spreads from 0.0 pips on Razor accounts, over 61 currency pairs, and commission-free account funding on a wide range of deposit options. In addition to currency pairs, Pepperstone provides many types of trading instruments, including CFDs for indices and shares, commodities, and cryptocurrencies.
Instruments in commodity trading are pretty much diversified. Not only metal, gold, and silver, but traders can also trade with soft commodities such as cotton, sugar, coffee, cocoa, and orange juice. Pepperstone also provides trading on energy (oil and gas).
There are two types of accounts provided by Pepperstone, namely Razor accounts, and Standard accounts. If you area beginner, it is recommended to choose a Standard account with an average EUR/USD spread of 1.0-1.3 pips and free commission.
Those with particular trading styles such as scalpers and algorithmic traders may enjoy the lower cost setup traditionally seen in a Razor account, with a commission from AUD7 round turn of 100k traded. You can start trading with a minimum lot of 0.01 (micro) and 1:400 leverage.
As a Pepperstone client, a trader can fund and withdraw with alternative methods including Visa, Mastercard, POLi internet banking, bank transfer, BPay, PayPal, Neteller, Skrill, and Union Pay.
If you are new to trading or looking to practice your trading strategies in a risk-free environment, you can create Demo Account in Pepperstone. But if you are an experienced trader or prefer to learn by doing, Pepperstone provides a Live Account that allows you to trade with live executions and pricing.
Traders can also follow and copy strategies from popular traders using third-party services while learning how to improve their trading abilities. Pepperstone has partnered with a range of social trading platforms that traders can choose from, such as Myfxbook, ZuluTrade, Mirror Trader, MetaTrader signals, and Duplitrade.
ActivTrades
| ⌛ Established | 2001 |
| 💲 Min Deposit | $10 |
| ⚖ Max Leverage | 1:400 |
ActivTrades facilitates forex trading for both retail individual and institutional clients. Retail traders will never experience overdrawn in their ActivTrades accounts, as they pledge Losses cannot exceed your deposits. Additionally, client funds are insured for up to 500,000 pounds, more than the UK financial services guarantee via the FSCS scheme.
The required starting capital in this broker is comparably lower than other brokers in this list at 100 pounds. However, leverage is limited at 1:400. With that balance; traders can buy and sell many assets and enjoy the trading facility under UK FCA regulation. Besides that, if you are interested in being an ActivTrades institutional partner, there are some tempting offer stands.
ActivTrades is a globally esteemed CFD broker that was founded in 2001. After establishing in Switzerland, ActivTrades made strategic arrangements to move to London. From this prime location, it was able to meet the need of vast markets including Europe, Asia, and South America, and gained rapid global appeal. Since then, ActivTrades has continued to expand and now has additional offices in Milan, Sofia, and Nassau.
The company is authorized and regulated by the FCA and is a member of the Financial Services Compensation Scheme. Under FCA regulation, ActivTrades fully implements enhanced segregation of clients' money. The safety of funds will be guaranteed as ActivTrades ensure the funds up to 1 million Pound Sterling.
ActivTrades is known for its reliable customer support. Customer service is provided 24/5 by telephone or fax to the UK office or by email. An online form for inquiries is also available as well as Live Chat. Support is offered in 12 different languages.
Because of that, the company gets awards such as Best Online Trading Service by ADVFN International Financial Awards, Best Customer Support by Agence IAT Grand Prize Excellence, and Best Customer Service by DKI & Euro am Sonntag. Besides, ActivTrades is also crowned as Most Trusted Forex Broker by MENA Forex Show and Best Forex Broker by Le Fonti.
It provides more than 500 CFDs on Forex, indices, commodities, shares, and ETFs. Clients can trade currency pairs with tight spreads from 0.5 pips and maximum leverage of 1:30. ActivTrades ensures all clients' trades to be executed at the best available price and with no re-quotes.
This broker does not charge any commission on foreign exchange trading. Their execution is fully automated and void of any dealing desks, ensuring that there is no human intervention on clients' trades.
Trading with ActivTrades is a gateway to major global indices around the world, including Nasdaq, Dow Jones, Euronext, FTSE, and many more. Traders can trades indices with spreads from 0.23 points. For commodity CFD trading, spreads are presented as little as 0.005 points.
One of the most detailed features at ActivTrades is the separate outlines for each market. Forex, commodities, indices, and share has their overview, timetables, margin listings, and spread table.
After registering for an account in ActivTrades, clients can choose a platform from three types that are provided, including ActivTrader, MetaTrader 4, and MetaTrader 5. The company designed the ActivTrader platform to utilize the latest technology and advanced functionalities to create an immersive trading experience. All variants of platforms can be accessed by mobile, tablet, and desktop usage.
There are many tools offered for use on the trading platform, including SmartOrder, SmartLines, SamartCalculator, SmartTemplate, SmartForecast, SmartPattern, and Pivot Points Indicator. With these tools, ActiveTrades can help clients to have advanced trading speed, precise execution with no, and ease clients' identification in locating entry points for buy and sell orders.
Trading education becomes a priority in ActivTrades. There are many variants of education methods that traders can choose. Besides a weekly webinar and ongoing seminars, the company offered an updated economic calendar and consistent market analysis.
Video tutorials on all of the tools and platforms are available without the need to register for a trading account. Furthermore, the personal one-on-one online training scheme provides a comprehensive learning experience tailored to suit each traders' needs.
Deposit and withdrawal requests can all be done from the trader's area. They accept various payment options to fund including bank transfer, credit/debit card, Neteller, Skrill, PayPal, and Sofort.
From the review above, education and customer support are the main priorities in ActiveTrades. This broker is suitable for traders who prioritize these two aspects. The company also has an FCA regulation that strengthens its reputation as a reliable broker.
FBS
| ⌛ Established | 2009 |
| 💲 Min Deposit | $5 |
| ⚖ Max Leverage | 1:3000 |
FBS offers negative balance protection on all of its trading accounts. This means traders can never lose more money than deposits in their FBS account. The company is headquartered in Cyprus and is regulated by the Cyprus Securities and Exchange Commission (CySEC). FBS offers various trading instruments, including forex, CFDs, stocks, indices, cryptocurrencies, and commodities.
Overall, FBS brokers with negative balance protection can be a good option for traders looking to protect themselves from losing more money than they can afford. However, it is important to note that negative balance protection does not guarantee that traders will never lose money. Traders should always trade with caution and manage their risk carefully.
Since 2009, the action of FBS Holding Inc. or known as FBS in the world of forex trading has been recognized by various international institutions. With clients reaching 14 million as of 2019, FBS has received the title of Most Transparent Forex Broker 2018, Best Investor Education 2017, Best Customer Service Broker Asia 2016, IB FX Program, and many others.
FBS is regulated by FSC Belize and CySEC Cyprus. This broker has been trusted by millions of traders and 370 thousand partners from various countries. Based on their data, FBS garners about 7,000 new traders and partner accounts every day. And, 80% of the clients stay in the FBS for a long time. No wonder the broker is growing rapidly due to the incredible growth in the number of clients.
Trading products offered by FBS range from forex, CFD, precious metal, and stock. For forex trading, CySEC-regulated FBS offers leverage up to 1:30 on Cent and Standard Accounts. Clients who want to try higher leverage than that can alternatively register an account under FBS Belize.
FBS spread begins from 0.5 pips for Pro account type and from 0.7 pips for Standard and Cent accounts. On a standard account, volume orders can be made from 0.01 to 500 lots. Therefore, this account is recommended for experienced traders.
Whereas on Cent Accounts, volume orders can be carried out with a maximum of 500 cent lots or the equivalent of 5 standard lots. Cent Accounts involve a different level of risk. FBS recommends Cent Accounts for beginner traders. All account types support the following trading instruments: 36 Forex pairs, 8 metals, 3 energies, 11 indices, 127 stocks, 5 crypto pairs.
Before plunging into the real forex market, traders can practice with FBS Demo Account which consists of two types, i.e Standard and Cent.
FBS uses the MetaTrader 4 and MetaTrader 5 platforms. They offer them on Windows and Mac as well as Android and iOS mobile. These platforms provide a trading experience at traders' fingertips, allowing traders to progress as a trader anywhere at any time.
MetaTrader platforms also have a variety of mainstay features, including the possibility to create, buy, and use expert advisors (EA) and scripts, One-click trading and embedded news, technical analysis tools, the possibility to copy deals from other traders, hedging positions, and VPS service support.
Another advantage provided by FBS is a deposit bonus of 100% for clients who fulfill certain requirements. The process of FSCing and withdrawing funds can be run easily and quickly. Based on clients' testimonies, each process usually takes no more than 3-4 hours, except on holidays.
Traders also have the opportunity to develop a side business when trading with FBS, namely as an Introducing Broker (IB) or Affiliate. The FBS partnership system provides partner commissions that are already in 3 level positions. Only by introducing new clients to FBS according to certain procedures, traders can earn extra income.
Traders will also get trading education experience at FBS. They have prepared a comprehensive forex course. The course consists of 4 levels: beginner, elementary, intermediate, and experienced. Traders can take courses that will turn them from newbies to professionals. All materials are well-structured. Besides, FBS provides various forex analyzes, webinars, forex news, and daily market analysis that can be accessed easily on their site.
Traders can access the FBS website with many language choices. Of course, this will increasingly provide comfort for traders. Available languages include English, Italian, French, Portuguese, Indonesian, Spanish, and others. Live chat support is also provided 24 hours 7 days a week.
In conclusion, FBS is a widely known broker among retail traders around the world. It continually grows to become a preferred broker because of flexible trading conditions that enable its clients to trade with various instruments, low deposit, and other trading advantages.
Conclusion
Negative balance protection is an especially important character to be sought after for forex traders who utilize high leverage. In this sense, it is good that the brokers mentioned above are not offering sky-high leverages but more moderate ones. OANDA is also one of the forex brokers providing negative balance policy with no high leverage,
If you are a fan of auto trading and wary of the robots making you lose more funds than you have on hand, it will be good to consider joining the aforementioned brokers. Still, they are not simply forex brokers with negative balance protection; they come with other terms and conditions you may be hesitant to accept, so read carefully before agreeing to anything. After all, it is one of the most important aspects to check when choosing the best forex broker.