Have you heard about negative balance protection? It’s one of the most well-known financial regulations that have been in place for many years. This financial regulation acts as a guideline to ensure a better and more stable financial sector. It also provides that the traders are safe and protected from deceptive and fraudulent practices. Do you wish to know more about it? If yes, please look no further as you have already landed on the right page.

What is negative balance protection?

Negative balance protection represents the broker’s obligation that your account will not be negative if your account becomes negative under highly volatile market conditions. The traders can not lose more money than the trading funds they have in their accounts.

Forex brokers with negative balance protection are a precautionary measure undertaken by the brokerage firms to safeguard their customers. This financial regulation has one key aim, i.e., the policy protects all traders and even ensures that they will not lose more money than the actual deposit amount. For example, if your trading account incurs a loss and turns negative while performing a trading activity, you won’t have to pay the negative balance.

What Is The Best Forex Broker with Negative Balance Protection?

The Best Forex Broker with Negative Balance Protection is HF Markets broker because of its fast execution and excellent support. If your account goes into a negative balance, HFM will not close your trades before the price breaks the allowed margin.

In my experience, your account will have a negative balance in 1-2 minutes, and then it will be a zero negative balance.

VISIT HFM

Negative balance protection brokers

Ratings are based on our analysis on the best forex brokers page.

Note, that all brokerage firms do not offer the same level of negative balance protection. It varies based on the rules and regulations of that particular firm. For your reference, here’re the top three brokers that ensure you’re protected against a negative balance loss.

• HF Markets broker has Negative balance protection, and in their contract, a trader can see

nder highly volatile conditions when margin calls and stop outs do not function correctly, no client is responsible for paying back a negative balance.

.

• The XM Group is a licensed, globally recognized, and well-known forex broker. It operates in many territories, including Australia, Cyprus, Belize, and the United Kingdom. The platform adheres to many regulations and policies, including CySEC, IFSC, ASIC, and FCA.
• Fxpro broker company is regulated, and It ensures all traders are offered negative balance protection in Order Execution Policy.
• Avatrade broker’s platform offers negative balance protection. They put in their contract:

In the rare scenario where a market move puts the client in a negative balance position, we will refund the difference through a “Negative Balance Adjustment”.

Example of Negative Balance Protection

Trader deposit: $500
Trader BUY EURUSD and enter two mini lots.
After the NFP report, EURUSD goes down 300 pips in a few seconds.
2 mini lots X 300 pips = 600 pips loss.
Stop-loss didn’t activate, and now the trader has a negative balance -$100.
Broker’s platform activates negative balance protection, and now the trader has $0 in his account.

Negative balance protection has gained importance since 2011 when the Swiss-franc-crisis occurred. During the Swiss-franc crisis, the Swiss National Bank has stopped keeping in conjunction with the value of EUR. This situation ultimately led to the sudden and rapid strengthening of the Swiss franc against the EUR. However, many traders were not prepared for this situation, and they eventually ended up losing more money than they originally had deposited in their respective accounts.

In such situations, the brokers used to ask the traders to deposit additional money to nullify the earlier days’ negative balance. But, the situation has now changed. Nowadays, the broker takes responsibility for the loss if there is a negative balance situation.

How to protect your account from negative balance?

There are three standard tools that you can use to protect your account from a negative balance. These tools are easy to use, accommodating as they prevent you from incurring a loss.

• Stop Loss Level: This tool is helpful when it comes to protecting your account from a negative balance. As a trader, you will need to mention the Stop Loss. It will be a reasonable way to save your money when there are instability and volatility in the market, and there are chances of rapid losses.
• Leverage: This is indeed an essential and crucial tool that protects you from a negative balance. Higher effective leverage translates to higher potential risks and more profit when there is higher effective leverage.
•  Transactions Volume: It’s another critical factor that protects you from a significant loss. Please bear in mind that all transactions can never be profitable. Some trades will be unprofitable, and you should be mindful and cautious about the transaction volume so that you do not incur a massive loss in such a situation.
  

Negative balance protection advantages

• First of all, Forex brokers with negative balance protection are not liable for losses. This regulation provides an extra advantage to the traders. That’s because — the brokerage firms will be responsible in such situations. Your broker will be the liable party if your trading account witnesses more loss than its actual invested money.
•  With negative balance protection enabled, your trading account will never turn negative. Even if the traders face a terrible loss, they will ultimately pay the maximum deposited amount. There will not be a harmful balance loss, and it will save you from debt.

Negative balance protection disadvantages

• It may appear like the broker is the only responsible party in a negative balance loss. But, here is a problem. The brokers may attempt to close out the market before favoring the traders.
• Those Forex brokers with negative balance protection usually tend to charge an increased brokerage fee. By demanding an increased brokerage fee, these Forex brokers attempt to cope with the negative balance losses.

Policies that support Negative Balance Protection

• CySEC Policy: Please note that all CySEC regulated firms enable negative balance protection. This policy was established by Cyprus Securities and Exchange Commission, and it is applicable to account basis. For example, suppose a trader has two different leveraged positions with a single Forex broker. In that case, funds in position can be used to clear out the negative balance caused by another position. However, the entire trading account will not ever get into a negative state.
• FCA Policy: FCA or Financial Conduct Authority policy applies to the UK-based brokerage firms and traders. It has set the maximum leverage values for the traders. So, for instance, if you are a better-experienced trader, your leverage cap will be 1:50. For the little-experienced traders, the leverage cap is set to 1:25. This policy applies to all FCA-regulated brokers.

Conclusion

Negative balance protection is an essential and essential precautionary measure for all traders. It protects traders against massive losses and lousy trading moves. With this regulation applied, it’s not the trader, but the brokerage firm will be the actual responsible party.

Since the Forex trading market is unpredictable and unstable, the above regulation will protect and safeguard you.

PayPal is widely regarded as the most popular online payment method worldwide. More Foreign exchange(Forex) brokers accept PayPal, which is becoming a popular payment method. Day traders prefer PayPal brokers because of quick transfers and greater security for the technique. It is also easy to link PayPal with credit and debit cards so that it is easy and fast to deposit or withdraw money. PayPal has strict rules for payment and withdrawal. Hence broker sites that accept PayPal can be trusted more compared to others.

Which forex brokers accept Paypal?

The best brokers that accept PayPal as a deposit and withdrawal option are FxPro and IC Markets. However, most brokers offer Paypal only for a limited number of countries. Usually, UK, Australia, EU, and Canada traders can use PayPal as a deposit and withdrawal option without restrictions.

VISIT IC MARKETS

For example, I live outside UK or Australia. When I use FxPro broker or IC Markets broker, I do not have a PayPal payment option.

However, if you live in the UK, for example, you can use PayPal as a FxPro deposit and withdrawal option (see image below):

Additionally, the same story is with IC Markets. If you live in the EU or UK, or Australia, you can deposit without restriction using PayPal (see screenshot below):

How to deposit or withdraw money at a broker using PayPal?

To withdraw money using PayPal or deposit money using Paypal, traders need to go broker’s member’s area, choose the PayPal payment option, and finish a withdrawal. However, the number of brokers that accept PayPal as a withdrawal option is small. Therefore, traders need to do a lot of research to find PayPal forex brokers. The best forex broker that offers Paypal as a deposit or withdrawal option in several countries is Fxpro.

PayPal Forex Brokers list

Around 14  regulated forex brokers accept Paypal, such as  Fxpro, IC Markets, Oanda, Vantage, XTB, Plus500, and eToro.  These brokers accept deposits and withdrawal transactions with PayPal. However, some traders in some countries have special restrictions on using Payies.

PayPal is the most prominent digital wallet globally since it has more than one quarter billion active accounts. The company was initially named Cofinity in 1998 when it was launched. Then, it was merged with Elon Musk’s company X.com. In 2001, the renamed company was called Paypal. It was publicly listed in 2002. Paypal has incorporated the latest web and mobile technology so that users can transfer money even more efficiently.

1.  Fxpro broker accepts PayPal.

Fxpro broker accepts PayPal, but only if you are a registered trader on Fxpro-Cyprus.

2. IC Markets accepts PayPal as a payment option: IC Markets are forex brokers that offer PayPal payment options for deposits. Processing time is instant.

3. Pepperstone broker offers PayPal
This broker offers several payment methods, and PayPal is one of them. You need to check with support if traders from your country can deposit and withdraw money using PayPal.

4. Oanda broker offers PayPal

Oanda is the most prominent US forex broker; everyone can be Oanda’s client worldwide.

Paypal payment options advantage

Though PayPal was not developed for Forex trading, it has become trendy. Hence more brokers are accepting PayPal since there are many advantages like:

• Fast, secure, and reliable fund transfer using Paypal
• Easy to make payment using a computer or mobile app
• Withdrawals and deposits with Paypal are quick, much faster compared to bank transfers
• the PayPal account can be linked to a bank account, credit and debit cards for withdrawals and deposits
• most companies worldwide are familiar with Paypal, a popular eWallet
• PayPal has stringent restrictions to prevent money laundering, so Paypal improves brokers’ reputations and reassures traders.
• The withdrawal and transfer limit is high at $50,000
• Forex traders will find it convenient since it can be used in 56 currencies.
• A PayPal account can be opened for free, and there are no charges for having an unused account.

Paypal payment option Disadvantages

Day trading using a PayPal account has some disadvantages listed below:

• Fees are charged for every transaction
• Foreign exchange conversion fees are relatively high at 4.5%
•  The costs for transferring money are increased by 4-12% of the amount.
• There are only a limited number of brokers accepting Paypal
• Chargebacks can be done only for physical goods, so CFD forex traders cannot do a chargeback.

PayPal Speed and security

Traders who have money in their account or linked bank account will find that funds they require for trading or money are withdrawn and transferred quickly from or to the bank account, usually within one day. Many traders feel that using Paypal is safer than using a credit/debit card since the recipient does not get any card details when the payment is made. Paypal stores personal card data so that it remains private. However, unlike credit cards, chargebacks are only allowed for physical goods, not currencies or stocks.

PayPal Deposits, withdrawals, and fees

In most countries, traders can deposit money and withdraw the balance from their Paypal account. However, in some countries like Ukraine and Israel, the account can be used only to send money; the balance cannot be used to withdraw to their bank account or credit card. In these countries, traders should not opt for Paypal. A Paypal account is opened free of cost, and most traders already have a PayPal account, which they use for online shopping. While other online wallets like Skrill and Neteller are charging a fee for unused accounts, Paypal does not charge any fee. The Paypal fees are similar to those set for other digital wallets, and a fee is charged for all transactions. The cost may be 12% in some cases. The PayPal balance amount can be transferred to the bank account free, though charges must be paid for a cheque.

Paypal for Forex trading

Though PayPal is not the most popular method for Forex traders, it can be a good option despite its high transfer fees. PayPal is becoming more popular worldwide, so traders expect it to become more popular. However, more significant Forex traders should be aware that there are limits on the transaction amount in Paypal, usually $10000 or GBP10000

PayPal is a popular electronic payment method used to pay online for various goods and services. The platform allows users to create a digital wallet that needs to be used to perform transactions. Paypal was founded in 1999 by a team of experienced veterans like Elon Musk. Elon Musk is currently the CEO of SpaceX Technologies and Telsa Motors. The forex trading industry can use PayPal as the deposit and withdrawal method. The best part about this platform is that it allows instant deposits and same-day withdrawals. Hence, there is a minimum waiting/processing time. For deposits and withdrawals, you can use PayPal’s digital wallet linked to your credit or debit card and connected with your bank account. Other than that, you can even use the prepaid cards that third-party companies or forex brokers themselves issue.

PayPal transaction methods for deposits and withdrawals have two added benefits. First, it’s seamless, hassle-free, instant, and requires less processing time. Secondly, the platform and its transaction methods are secure, so your privacy and confidentiality will be protected at every cost.

Why should you use PayPal as the payment method at your broker?

•  PayPal offers a secure way to deposit and withdraw funds to your forex account.
•  The method is simple yet secure.
•  It comes with several user authentication processes for ensuring 100% security.
•  PayPal digital wallet is fast, and most transactions will be instant.
•  The platform is a multi-currency platform that supports more than twenty-five unique currencies. Hence, you will no longer require offline currency exchange.
•  The platform charges a small amount of fee.

There are two factors that you should check.

First of all, please check if your country supports PayPal transaction services. A small list of territories is blocklisted from using PayPal. If you belong to such a country, it will be a problem. Secondly, please check whether your country has the “Send Only” status in PayPal or not. Some countries that accept PayPal payments come with Send Only status.

Send the Only status means you can deposit funds using this payment method, but you cannot withdraw funds using PayPal. The best option is to look for a forex account to send and receive funds using PayPal.

PayPal offers a chargeback payment option for all disputed transactions. For example, if the trader does not ultimately authorize a deposit transaction, you can take advantage of this Paypal chargeback process, and the platform will initiate the refund.

Try PayPal payment option and visit IC Markets:

VISIT IC MARKETS

Kuwait, famously one of the fastest-growing economies, has the most vital currency globally – the Kuwaiti Dinar. In addition, this country offers beautiful dunes and a modern cityscape. While religion is an integral part of Kuwait, this is one of the most liberal countries in the Persian Gulf area. 

The Kuwaiti modern financial market was established in 1991 post the Iraqi invasion. It offers a secure and safe environment for trading Forex, stocks, and other commodities. This Middle Eastern country is strategically located, with Iraq and Saudi Arabia on its borders. The Central Bank of Kuwait (CBK) controls the trading markets. It imposes strict laws on its brokers to ensure the safety of the investors.

Kuwait is a member of the Gulf Cooperation Council. Its leading stock exchange is Boursa Kuwait, earlier known as the Kuwait Stock Exchange (KSE). CBK regulates all the brokers, and the trade is majorly made in the Kuwaiti Dinar’s home currency.

It would help if you always familiarized yourself with the broker’s trading options of a country. For example, you have several Kuwait options, ranging from Indices and ETFs, Forex, CFDs, cryptocurrencies, and commodity markets. You can discuss this with your broker in detail to find your best match.

Kuwait Forex Brokers list:

The best forex brokers in Kuwait are HF Markets and Avatrade. Avatrade is the best Islamic forex broker and one of the first brokers founded and used by Middle East traders. However, today all significant brokers on the list below offer Islamic accounts.

Trading with Kuwaiti Dinar Brokers

There is a general perception that Kuwaiti brokers only work with native investors, but such is not the case. They work with Kuwaiti brokers as well. While the country offers some of the best trading brokerages in the Middle East, there are specific guidelines that you will be expected to follow while trading in Kuwaiti assets.

Before you set up a trading account, you need to find Kuwaiti Dinar Brokers licensed and directly regulated by the CBK. The next thing would be to safeguard your funds. Ensure that your broker keeps your funds in a separate account, and his access to that money is limited. This will keep your broker from your money in case he goes bankrupt. 

Look for Kuwaiti Dinar brokers who allow you to open a demo account with them. Open multiple accounts with multiple brokers. This practice will help you learn how different trading platforms work, and you will gain experience without using real money.

Kuwaiti brokers offer numerous trading platforms to their online clients—for example, AXi and MT4. You can also talk to them about mobile trading apps that could be used in trading Forex, CFD, stocks, and other commodities.

Advantages of Trading in Kuwait

Kuwait is not a vast country. The majority of its population include includes professionals on a work visas. However, as per the World Bank reports, it stands in 7th place in paying taxes and holds 69th rank in registering property. 

The Middle Eastern country has an ongoing large electricity generation project. The government also focuses on developing a new airport, some major roadways, and a new metro system. They are importing transportation equipment in large numbers from countries like the USA. Most of the funding is allocated to defense projects and securities.

Economic studies have shown us that high imports often depreciate a currency as they start losing its assets. Such is not the case with Kuwait. Despite such high imports, the Kuwaiti economy is flourishing for one main reason – the export of petroleum. This has been enough to keep the Kuwaiti Dinar as the strongest currency globally. Another reason for the growth of the economy is the growing population. The development of the population is creating business opportunities for many companies.

Disadvantages of Trading in Kuwait

For the last two decades, the export of petroleum has kept the trade balance intact. 95% of their export is of oil. If the country stops exporting petroleum, it will have a negative balance of trade. This means that any disturbance in the Middle East can significantly affect Kuwait’s import and export balance. Also, if there is a significant fall in oil prices, the country’s economy will take a setback.

While the Kuwaiti economy is strong, it is not very welcoming. According to the World Bank, the country ranks 159 to do business, 133 in obtaining credit, and 134 tradings across borders. It is not easy to get electricity for business here compared to other Middle Eastern countries. It could be said that Kuwait has a somewhat closed economy.

Another universal trading problem that exists in Kuwait as well is of defrauding. Due to the digitization of financial trading, fake brokers have made it easier to dupe the investors. Therefore, before you finalize any broker, make sure they pass the checklist for brokers that we have shared below.

The Verdict on Kuwaiti Dinar Brokers

Regulated Kuwaiti Dinar brokers strictly abide by the guidelines issued by the Central bank of Kuwait. Thus, creating a safe financial market. The country has been growing steadily because of a positive trade balance. 

The government has realized that the downfall in petrol prices can adversely affect the economy’s growth. Therefore, they have undertaken various development projects. These major projects will keep the Kuwaiti economy afloat should there be a decline in petroleum or disturbances in the Middle East.

Forex Trading in Kuwait

Let’s begin with answering the most frequently asked question – is Forex trading legal in Kuwait? 

Yes, Forex trading is legal in Kuwait. This concern haunts many traders because countries with Sharia law, like Pakistan, often make Forex trading illegal. Such is not the case with Kuwait. It is a very active market in Kuwait. Forex is used in imports and export and has become an integral part of the economy. Kuwait also invests internationally. 

Forex trading has been steadily rising in Kuwait for the past five years. There has been a stable growth in technology and network coverage in Kuwait. Both factors have a positive effect on the development of Forex trading. 

All you need to do is to be careful in selecting a Kuwaiti Dinar broker. Then, if you move ahead with a regulated broker, all you need is an excellent strategy to further your profits.

Paying Taxes on Forex Trading in Kuwait

Understanding the country’s taxation system where you plan to trade should be an integral part of your business strategy. If you make sure profits in a financial year, you will pay the Kuwaiti government’s taxes. You must file your taxes irrespective of the percentage of gains or losses you have encountered during a financial year. 

Understanding the taxation system of a different country can be a cumbersome task. If you need some assistance, do not hesitate to hire an expert to ensure that your taxes will be filled at the proper government agencies. You can also claim trade losses against personal income taxes in Kuwait. Your expert will guide you through it. Kuwait does not impose additional restrictions on Islamic accounts.

Kuwait and Cryptocurrency Trade

The cryptocurrency market is pretty new in Kuwait. While many significant economies have banned virtual currencies like Bitcoins, Kuwait is moving forward with it. You can open an account, sign up for a secure wallet, and take things further.

As the young generation is warming up to technology, Kuwait’s cryptocurrency trade has significantly increased. It is expected to rise more in the coming years.

Commodity Trading in Kuwait

Countries like China and India are growing rapidly in infrastructure and population. This means that there will be a demand for petrol, metals, and food. Kuwait can tap on this demand for its advantage and expand its business.

Checklist for Finding the Ideal Kuwaiti Dinar Broker

You need to keep in mind numerous things while selecting a broker. Irrespective of how perfect your trade strategy is, all will be in vain if your broker is not correct. So, before you finalize a Kuwaiti Dinar broker, ask them the following question:

Q1. When were they established?

Ideally, your broker must have a minimum trade history of at least two years. This is the minimum requisite. If they fail to prove this, you should move to a different broker. Some brokers have been offering their services in Kuwait for more than ten years, like Hotforex and Avatrade. They are the most trusted brokers in the field. If you feel uncomfortable with a new broker, you can always collaborate with these two.

Q2. What is their global standing?

Whether new or old, everybody wishes to work with industry leaders, but established brokers often charge a hefty fee. You don’t have to be only with the best to earn profits. Just make sure that your broker has an international presence and is known otherwise. This will ensure that they are genuine and keep expanding trade in different countries open.

Q3. How much will they cost you?

You can pay commissions or fees or both to your broker. While most brokers will discuss it with you before signing anything, some might refrain from this question. So be wary, as these are some red flags. Always discuss commissions and fees in advance with your Kuwaiti Dinar brokers to avoid sharing a massive chunk of your profits later on.

Q4. How good is their customer support?

You are mistaken if you think your broker will prioritize you and pick up your call at the first ring. Yes, they will treat you justly, but you need to understand that you will not be their only client. So what will you do when there is an emergency, and it is the middle of the night in their country? Here, customer care will come to your rescue. You will also need customer care support to overcome any language barrier. Don’t forget to ask your broker about the languages offered by their customer support.

Q5. What are their funding and withdrawal methods?

Having easy funding and withdrawal methods makes trading more accessible and creates a security blanket for you. For example, if you decide to close a trade or withdraw your deposit, you will not have to wait for months to get hold of your money. Instead, go ahead with a broker who offers withdrawal within 2 to 3 days.

Q6. Who is their regulatory body?

It would help if you bevered trade with a broker who is not regulated. Most Kuwaiti Dinar brokers comply with the rules set by the Central bank of Kuwait. You must check their license before making any commitments. If you are replying to international traders like Hotforex and Avatrade, you must check their license and regulatory bodies. Both of the above-stated industry leaders are regulated by the Cyprus Commission, Financial Services Authority (FSA), and the Australian Securities and Investment Commission (ASIC).

How to choose Kuwait brokers?

First, you should make sure that your trader is licensed and regulated. In addition to that, various other factors make a broker a good choice. We have a comparison table of top brokers keeping the following factors in mind:

1. The minimum deposit required
2. Availability of funding
3. Trading platforms offered
4. Variety of commodities traded
5. Spread type for each brokerage
6. Level of customer support
7. Accounts provided by the brokers (Islamic, Standard, VIP, and Micro)

Currently, brokers that offer KWD accounts do not exist. Usually, accounts are in USD, EUR, or significant world currencies. However, a lot of forex broker offers Islamic accounts such as:

Conclusion

Use the above table and educate yourself as much as possible before finalizing your broker. Kuwait offers a safe and secure market, but things can move in the opposite direction if not with the right broker. Thus, it all comes down to choosing the right one.