Normally, you cannot reach a negative balance. We will not allow you to lose more than the available funds on your trading account. Your account will simply be closed when the resulting account balance reaches a value below zero.
In extreme cases, we will offset your negative balance.
EXPERT ADVICES OF RISK MANAGEMENT
With NAGA Trader you have full control over your money. With NAGA Trader you decide how much risk you take by defining your risk level. Further you can always adjust the take profit or stop loss levels. You can also close trades without facing the risk to lose more than you are willing to risk. A proper risk management is the success formula of every profitable trader.
Moreover, NAGA Trader will always inform you via smart push-messages.
What are the key figures for a proper risk analysis when copying others?
The following figures must be taken into account in your risk strategy because followers pay particular attention to them:
Accuracy: Which percentage of past trades were positive?
Rank: Which rank does the trader have in the “Leaderboard”?
Profit: How much profit did he/she make in the past?
It is very simple. No drawdowns, no volatility, no sharpe ratios and no other figures that nobody understands. Just a simple and transparent performance approach, which is clear to everybody.
First of all you should be aware that NAGA Trader traders are exposed to risk. Although traders may have shown a great past performance, it does not mean that they will show the same performance in the future. Before you copy the trades of NAGA Trader traders, you should first try our Demo Account and test your chosen trades and strategy. Afterwards, you can start trading with small amounts, and when you are absolutely sure, invest larger amounts.
You should also be aware that your account might be massively leveraged depending on the leverage ratios of your chosen broker. Please remember that with an increased risk you could very quickly end up with a total loss.
What is leverage?
To multiply your capital (to trade with more money than you are able to invest), you can leverage your position. Different brokers offer different leverage rates. For example, if the leverage is 1:20, you can move 20 times more volume (money) than you deposit. Meaning, if you want to buy 100 EUR/USD, you only need to actually have €5. This allows you to get much higher profits, but also higher losses.
What is a margin?
Margin is a collateral (borrower´s pledge to secure the repayment) to cover possible trading losses. For example, if the leverage is 5, and you want to trade $100 you would need to deposit only $20, which is called the margin. The smaller the margin percentage, the more “powerful” the position is.