In the FXGT account, a zero-cut system is adopted that does not require margin calls if the balance becomes negative, so there is no risk. This system has great benefits for traders. Therefore, Crypto GT can be said to be a cryptocurrency exchange that is operated from a trader’s perspective. We have summarized the zero-cut system.
What is zero cut?
Zero cut is when a sudden market fluctuation can cause a large unrealized loss, and in some cases the account balance can go negative. In this case, if the zero cut system is adopted, the negative amount is compensated by the FX company or cryptocurrency exchange, making it zero. In other words, traders do not have to risk going negative and getting into debt. In other words, it is a very useful system for traders. The system is set according to the balance and margin line along with the loss cut. There are no disadvantages as the negative amount will be compensated if necessary.
FXGT adopt zero cut
FXGT uses a zero-cut system, so even if the market suddenly changes and falls to a certain negative level as mentioned above, there is no risk of going into debt, so you can rest assured. There is no margin call, so you can trade without worrying about the amount when using this company over others. This is a recommended company. As long as you do not engage in prohibited activities, you can use your assets to trade effectively. Multiple methods such as hedging and scalping can be applied. You can trade as you like with a standard or mini account.
Cases in which a negative balance occurs
So, what you are wondering is, how does a negative balance occur in the first place? It doesn’t happen that often, so I think many people are concerned about it. Below is an example. If you continue trading like this, you may not have enough funds. There will be warnings such as margin calls, but it can melt away in an instant. It is important to keep the lot size small according to your purpose on the platform and play it safely.
sudden market fluctuations
In recent years, there has been considerable anxiety around the world, and the risk of war has increased, and the situation is dangerous. For example, when there is a political change or a shocking interest rate policy announcement, the market changes suddenly at a frightening pace. When such cases occur, there are many cases where forced loss cuts are delayed. If the chart fluctuates greatly in an instant during the few seconds until the loss cut is processed, the loss cut will not be in time and the account balance will be negative.
too many lots
If you put in too many lots even though you have very little capital, the forced stop loss will be triggered when the chart changes dramatically in an instant, but if the change occurs within a few seconds like the above, the stop loss will not be triggered in time and your account balance will go negative. This is when the zero cut is used. If your balance or margin maintenance rate goes negative, the shortfall will be compensated for as necessary.
Will negative balances occur?
Negative balances do happen. According to statistics compiled by the Japan Financial Futures Association, there are several thousand cases in Japan alone. No matter how automated our society becomes, we cannot keep up with the rapid changes. It is a trap. This is why zero cut is used. If the balance or margin maintenance rate becomes negative, the shortfall will be compensated for as necessary. The system applies this along with loss cuts according to bonuses and margins.
| Year 発生年 | Minos balance マイナス残高件数 | |
| Apple Shock | 2019 | 6,389 |
| China Shock | 2015 | 4,820 |
| Swiss franc shock | 2015 | 1,137 |
Source : 金融先物取引業協会
Is Zero Cut Advantageous for Brokers?
When you look at the zero-cut system, it seems as if it is an advantage for the trader. We usually adopt zero-cut for gold, crypto assets, Bitcoin, etc. when investing, but there are also benefits for the company. Take advantage of luxurious promotions. If there are no major violations of the terms, zero-cut will be adopted regardless of the number of times. The basics are to make a profit by using very narrow spreads with your own tools.
sense of security
The fact that the zero cut system is adopted means that there is no debt. As a result, brokers can attract more traders. And it will also result in a dramatic increase in the number of users who actively trade, which will be profitable.
litigation risk
If the zero cut system is not adopted, if there are many users who have a negative balance and cannot make money, they will have to file lawsuits one by one. By adopting the zero cut system, there is an advantage that such wasteful work can be cut.
Conditions for triggering zero cut
The last thing you should know is that the zero cut is triggered only when the account balance becomes negative and the bonus is gone. Since there is a cushion function, the zero cut will not be activated unless you lose all the bonuses. The bonus can only be used for trading and cannot be withdrawn, but it is also a great service that allows you to increase your trading funds.
margin call
First, a margin call will be activated before the zero cut. Margin call is an alert function that notifies traders that unrealized losses on their positions are increasing. Margin call will be activated at 70% margin maintenance rate for ECN,Crypto Max,PRO accounts and 50% margin maintenance rate for other accounts. You must either write down your current position or make an additional deposit.
| Margin Call | |
| Standard | 50% |
| Mini | 50% |
| Crypto Max | 70% |
| ECN | 70% |
| PRO | 70% |
loss cut
When a stop-loss cut is activated, positions with unrealized losses will be liquidated, and the loss will be fixed. For ECN,Crypto Max,PRO accounts, the margin maintenance rate is 40%, and for other accounts, the margin maintenance rate is 20%, which is the loss cut. If you do not take some action at the time of a margin call, a stop-loss cut will be triggered.
| Loss Cut | |
| Standard | 20% |
| Mini | 20% |
| Crypto Max | 40% |
| ECN | 40% |
| PRO | 40% |
zero cut
The last thing to be activated is the zero cut. If the margin maintenance rate falls below 0%, the zero cut system will be activated. When the zero cut system is activated, FXGT will bear the loss of the account balance that becomes negative, so traders will not have to chase debts. FXGT is a broker where you can safely trade with high leverage.
Precautions for zero cut
Zero cut only has advantages for traders, but there are some points to be aware of, so please check the following information and points for reference. Campaigns and bonuses are offered, so take advantage of them and make money with MT4. Even if you are a beginner, you should study to gain more knowledge later. If you don’t understand, ask support about these things. Even if you incur a loss, there will be no margin call as long as you have this. Continue to make money with a wide variety of stocks.
Transactions that exploit zero cuts
If you abuse the zero-cut system, you may be penalized. In that case, you may be at risk of having your account frozen, so be careful. We recommend that you thoroughly understand the categories of terms of use on the official website before proceeding. Even if you are a professional, you should always avoid violations. The operating company has set standards, so be sure to check the latest information and details.
Bonus disappears
When a zero cut is adopted, the bonus disappears. FXGT has a cushion function, but when a zero cut is adopted, it means that all the principal and bonus disappear. If you would like to keep your bonus, please add margin when a margin call occurs to avoid a loss cut or zero cut.
Loss cut in descending order of loss amount
In FXGT, losses are cut in descending order of loss amount. Therefore, the deeper the damage is in a position, the sooner it is better to cut the loss manually.
If you touch the prohibited items, you will not receive a zero cut.
As explained in the article above, please be careful as if you violate any prohibited items, you may not be eligible for a zero cut. If a prohibited item is discovered, not only will you not get a zero cut, but you may not be able to trade again.
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