So, if you see MT4 negative balance than can you deposit money in the Metatrader account?
MT4 Negative Balance is a temporary problem in the MT4 account. If you deposit money in an account that has a negative balance your current balance will be no less than the amount you deposit because all Mt4 accounts have a negative balance protected system.
Foreign exchange (Forex) trading is a very risky business since the exchange rate of different currencies can fluctuate greatly due to a number of factors. While most forex traders will only trade with the balance they have in their account, often some unexpected events may occur due to which they have an mt4 negative balance in their Forex account. For example, on January 15, 2015, the Swiss National Bank (SNB) unexpectedly took a decision on floor removal for the EUR/ CHF( Swiss Franc), currency pair. This resulted in thousands of forex accounts used for live trading having a negative balance since they had not anticipated this floor removal.
Though the SNB decision on floor removal resulted in a very large number of forex accounts having a negative balance at about the same time, there are other instances when the MetaTrader accounts for forex had a negative balance. If the volatility for a particular forex pair changes rapidly, the trading platform mt4 could show a negative balance. Even a large gap in the prices of different currencies could reduce the balance below zero. Trading in Forex is now widely linked to having a below-zero balance. Though precautions like stop-out levels and margin calls are taken to prevent this problem, many forex traders continue to face the problem.
However, Forex is often advertised as an online money making option where the trader cannot lose more money than what he deposits in the forex account. This is because some forex brokers like FXTM are offering negative balance protection to all the forex traders who have opened their account with them. This is a marketing strategy of the forex broker. So even if the balance is negative, if the forex trader will deposit the amount, he will be able to trade with the entire amount deposited with FXTM, the negative balance is not deducted from the amount deposited. In some cases, the amount in the account may be slightly lower than the deposited amount and this is because of the payment processor fees.
In many cases, forex traders are mentally prepared for the loss and are willing to take the risk of investing more money, since they may have made good profits earlier. So in this case, they may replenish the negative balance. In other cases, the forex broker has lawyers who will contact the forex trader whose balance has become negative. These traders are now debtors of the forex broker, owing him money. So like all lenders who try to recover money from debtors, the forex broker will also try to recover money from the forex trader, especially if the amount is large.
Often people with less experience invest money in forex trading because they are lured by the advertising and promises of quick money. When they find that the balance in their account has become negative, they become discouraged and may stop forex trading in the future. The forex mt4 account will be abandoned with a negative balance. If the negative balance is small, it may also not be feasible for the forex broker to initiate legal action against the trader to recover the amount.
MT4 Negative Balance is a temporary problem in the MT4 account and when you deposit a new amount of money current balance will be no less than the amount you deposit – so you are protected as a trader.