HF Markets negative balance protection will limit clients' liabilities in the event of extreme losses.
HF Markets is a globally-operated forex and commodities broker that has been established since 2010. At the latest count, more than 3 million accounts have been opened at the company.
There are lots of reasons why people choose HF Markets, such as HF Markets' negative balance protection. What is "negative balance protection"? And how does it benefit traders?
Negative Balance Protection in Forex Trading
Negative balance protection is a specific term provided by forex brokers that limits clients' liabilities in the event of extreme losses. Here is how it works.
The use of leverage in forex and CFD trading may cause traders to lose more than the amount of funds they have deposited. In a normal market situation, stop outs and margin calls will work together to prevent a trader's account balance from going below zero. However, both measures may not work during extreme volatility, and the trader's account may go straight into negative territory. In such a terrible disaster, what will forex brokers do?
Several brokers may require their clients to shell out a hefty amount of money to close the gap because a negative account balance means we owe them. However, some other brokers have established "negative balance protection" to stop clients' drawdowns at zero dollars, or automatically adjust a negative account balance into zero.
In recent years, European financial market regulatory bodies have commanded all providers of leveraged financial products (including forex brokers) under their supervision to provide negative balance protection. This is regarded as the client's right, instead of an optional offering.
HF Markets' Negative Balance Protection
HF Markets is one of those legit online brokers with a negative balance protection clause attached to all of its trading accounts. The measure means HF Markets will never demand payment from any clients with a negative account balance, and their clients are not responsible to pay back the money.
To activate the feature, HF Markets clients only need to contact customer support via live chat or email. The procedure is done after the account balance turned into negative. So if a client contacts the broker to activate the negative balance protection, HF Markets would reset their account balance to zero. Clients are recommended to claim the protection before making any new deposits.
HF Markets offers their clients more than just fund safety through negative balance protection. HF Markets Group of companies has earned licenses from a number of authorities, including the UK Financial Conduct Authority (FCA) under firm reference number 801701, Dubai Financial Services Authority (DFSA) under license number F004885, and many others.
🌐 WebsiteHF Markets is an award-winning forex and commodities broker. Established since 2010, the company provides trading services and facilities to both retail and institutional clients. For more than 9 years in business, HF Markets has around 1,500,000 live accounts opened and 200 employees globally.
Based on its services, HF Markets can be regarded as middle-class category. Clients do not need to prepare a big deposit for joining to trade with this broker. Also, there are various account types, trading software, and tools to facilitate individuals and institutional customers to trade forex and CFD online.
HF Markets is a registered brand name of HF Markets (Europe). Based on the location, the company is regulated by various financial regulators. Here are the details:
- HF Markets (SV) Ltd, registered in St. Vincent & the Grenadine as an International Business Company with the registration number 22747 IBC 2015.
- HF Markets (Europe), authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) with Licence Number 183/12.
- HF Markets SA (PTY), is authorized and regulated as a Financial Service Provider (FSP) by the Financial Sector Conduct Authority (FSCA) in South Africa, under license number 46632.
- HF Markets (Seychelles), incorporated under the laws of the Republic of Seychelles with registration number 8419176-1, regulated by the Seychelles Financial Services Authority (FSA) under Securities Dealer Licence number SD015.
- HF Markets (DIFC) Ltd, authorized and regulated by the Dubai Financial Services Authority (DFSA) under license number F004885.
- HF Markets (UK) Ltd, authorized and regulated by the Financial Conduct Authority (FCA) under firm reference number 801701.
If traders have more experienced, knowledgeable, and sophisticated trading environment, they can join to become Professional Clients, who can manage and assess their own risks. For that reason, these kinds of clients are granted access to more favorable rates but afforded lesser regulatory protections than retail clients.
Trading with HF Markets can enable traders to access a variety of trading instruments like CFDs on Forex, Cryptocurrencies, spot metals (gold, silver, and others), energies (oil and gas), commodities (such as coffee, copper, and sugar), indices, bonds, and popular shares such as Google, Apple, and Facebook.
HF Markets offers some of the tightest spreads in the market, starting from 0 pips in Zero Account. This broker quote major foreign exchange currency pairs to five decimal places. Therefore, traders have the opportunity to get more accurate pricing and the best possible spreads.
HF Markets receives numerous highly prestigious titles, including the huge honor of being ed to join the ranks of the World Finance Top 100 Global Companies. Others are Best Client Funds Security Global by Global Brands Magazine, Best Global Forex Copy Trading Platform by Global Forex Awards 2019, Fastest Growing Forex Broker Mena 2019 by International Business Magazine, and many more.
After opening an account in HF Markets, traders will obtain various forex trading platforms to accommodate all of their trading demands. Whether traders like to trade on desktop or prefer to trade on-the-go, they can use MetaTrader 4 on desktop (terminal, multi-terminal, and web terminal) and phone (iPhone, iPad, and Android).
Clients' funds are held in segregated accounts. Only major banks are used by Markets because they believe that successful traders have to give their full attention to their trading rather than worrying about the safety of their funds.
Traders do not need to worry about transaction fees when depositing and withdrawing. Transaction fees are not charged, and diversity of payment methods enable them to choose between Wire Transfer, Bank Card, and online payments (Neteller, iDeal, Sofort Banking, and Skrill). HF Markets ensures that traders make fast transactions 24/5 during the standard hours.
Traders can earn extra income by joining the affiliate program offered by Markets. Clients who join this program will get some advantages, such as 60% of Net Spreads based on the volume traded by sub-clients, up to $15 per a lot of net revenue, and many more. More information about HF Markets can be obtained on their official website which is supported in 27 languages.
From the review above, it can be concluded that HF Markets is one of the award-winning forex and commodities brokers. There are various account types traders can choose in HF Markets, and the broker itself becomes a favorite among traders for its low spreads. This condition is very suitable for traders with limited funds and a desire to get more opportunities to gain maximum profit.
Even so, traders have to note that negative balance protection and all those licenses will not prevent normal losses. For instance, if you trade against the ongoing trend and suffer huge floating losses, you may trigger stop outs and margin calls that cause your account balance to drop significantly.
You still have to do your homework in order to avoid losing money during forex trading. Before going live in HF Markets, use a demo account to create proven trading strategies and practice proper money management. Maintain a trading journal and limit your use of leverage. When in doubt, do not use leverage higher than 1:100.
HF Markets offers free demo trading accounts in MetaTrader4 and MetaTrader5 to both new and experienced traders. You can use it for as long as you want in order to get used to your chosen leverage because the broker will only cancel it if you are inactive for more than 29 days.
HF Markets is a global Forex and Commodities broker that facilitates both retail and institutional clients. Previously known as HotForex in the brokerage industry, HFM has positioned itself as the forex broker of choice for traders worldwide through their various account types and trading tools. Furthermore, HF Markets allow scalpers and traders use Expert Advisors unrestricted.
5 Comments
Kevin
Jan 18 2023
What if the broker doesn't offer negative balance protection? Negative balance protection is like a margin call, right? I think it's very unnecessary as you don't actually take a loss unless the trade entry is closed. Why a broker needs this feature when you can wait as long as possible for the price to move the profitable direction. Margin calls and loss cuts sometimes may protect us, but instead of protecting us they bring us losses more and many traders, myself included, are skeptical of this. I quit forex for this reason. This means that as long as you don't close your position, you won't incur any losses. Why bother us with such terms?
Russell
Jan 18 2023
Kevin:
Negative balance protection actually protects your money from negative balances. This means you never lose all your funds for trading. Negative balance protection, in my opinion, is annoying for smaller traders and beginners as it limits trading. However, for traders with larger funds, negative balance protection has proven to save money: if you deposit $100, no margin calls are allowed below 60% of his. For a trader from a large bank, the total loss amounted to $40. Deposit $10,000 and save almost $6,000!!!
And there is one very important thing to know. If you close your listing with a negative balance, you owe the broker money. Imagine if you just want to trade but you end up owing money to a broker because there is no negative balance protection! So as a broker that owes you money, it is better to protect your money. Negative balance If you say protection bothers you, you should learn to manage your money first. You can read this article: Optimizing Money management.
Sandy
Jan 18 2023
Kevin:
Before trading, we recommend using a demo account to avoid margin calls. Negative balance protection is now mandatory for European brokers. I don't know about other regulators around the world...but there were a few cases before negative balance protection was created, the famous one being the aforementioned Black Thursday. The sudden removal of its CHF peg from the euro by the SNB has caused extreme market volatility in the forex industry, resulting in hundreds of millions of dollars in losses and the closure of numerous forex brokers.
As a result, many traders are indebted to their brokers, and many brokers go bankrupt because their money also affected and make the brokers do not function well. Therefore, negative balance protection is created to avoid these things.
(for more thing about negative balance protection , you can read : Negative Balance Protection in Forex Trading)
You
Alejandro
Jan 18 2023
Hello mister, what is the difference between margin call and cut loss i have read some broker trading condition and found some Forex term. There is a term called margin call and stop out., what does stop out mean? I mean, everyone is afraid of margin calls, but sometimes traders, like my aunt, say the stop out even the awful things. In my opinion, these two terms have a negative balance protection relationship, right? I am new to forex. Please correct me if I have the wrong idea about the concept of Forex and some terms at Forex. Thank You!
Lucas Enex
Jan 18 2023
Alejandro: It's very easy to distinguish between a margin call and a cut loss. Here's my explanation:
But, in the other hand
Some brokers have Margin Call and Stop Out rules. One of the rules that may apply is Margin Call Level = Stop Out Level. So if you hit Margin Call, you will automatically hit Stop Out as well. For this reason, a margin call is sometimes said to mean bankruptcy or the forced closure of all losing positions.
If you are still confused, please refer to the following article: Forex Margin call vs Stop Out