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Effective Risk Management
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Effective Risk Management

Forex Trading can generate outstanding returns on limited capital although it is still possible to lose more than you deposit.
Hirose Financial UK has implemented a Stop-Out Policy to help protect its clients from losing more money than the remaining balance in their accounts.

We would like to explain what it is about.

What is a Stop-Out Policy?

Stop-Out orders are automatically executed to close every outstanding position when a client's account has less equity available than margin required to maintain an outstanding position.

※Hirose Financial UK has implemented a Stop-Out Policy to help protect its clients from losing more money than the remaining balance in their accounts but you could still lose more than your initial investment subject to market conditions.


When your account Equity Level falls below 100% of the Used Margin (Margin Requirement) of your open position, the trading platform will then close all positions automatically and without any prior notice to you.

Equity

 

Margin Requirement

   

Balance

Realised P/L

Unrealised P/L

The deposit needed to open a position

=

Auto Stop Out

You will need sufficient funds in your account if you do not want Stop-Out orders to be implemented.

Equity

 

Margin Requirement

   

Balance

Realised P/L

Unrealised P/L

-

The deposit needed to open a position

=

Usable Margin

※You can manage risk more effectively by making sure that you have sufficient Usable Margin in your trading account.

Example of a Stop Out
1. Your initial deposit is £1,000.
  Your Account status is:
  Balance Equity Used Margin Usable Margin Net PL
  1,000 1,000 0 1,000 0
2. You buy 100 lots (100,000 units) of EURGBP at 0.87500
The margin requirement to open the position is £3 per lot (1,000 units)
  Your Account status is now:
  Balance Equity Used Margin Usable Margin Net PL
  1,000 1,000 300 700 0
3. EURGBP then falls to 0.86800 after a news announcement creating a loss of £700
(0.86800 - 0.87500)x 100,000 = - £700
  Your Account status is now:
  Balance Equity Used Margin Usable Margin Net PL
  1,000 300 300 0 -700
  In this example Usable Margin has decreased to zero (Equity - Used Margin) meaning that there are not enough funds in the Account to maintain the existing open position. The open position (or positions) is then automatically closed.

Segregation of Client Funds

All Retail Client Funds are segregated from our money. That means that if Hirose Financial became insolvent your funds would be returned to you.
We have client trust accounts with Tier 1 Banks specifically for client funds which means that we cannot comingle your money with our money.

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