I had 4 open "sell" orders on MetaTrader4 Android App but they disappeared! I've lost all my money! Help!

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I am trading EFEUSD on the MetaTrader 4 app on Android. I am new to trading crypto and just put 500USD into my account to trade with. I had 4 open "sell" orders for ESEUSD but then the price of the ESEUSD I was trading skyrocketed above the price I had originally placed my orders and thus my free margin went -$600+ (obviously not enough to pay back), but then I checked my orders and they had just disappeared? I understand that the app (or was it my trading account?) may have closed my orders before my free margin went further into negative but couldn't I have just held and kept the orders open until the price of the EFEUSD dropped below my original "sell" order price and then closed the order with profit, thus increasing my free margin back to positive??? Why did they have to cancel my orders automatically? I could've waited for the price of the EFEUSD to go back down (which it does, it fluctuates everyday) and made the profits back? It doesn't make sense for them to get cancelled or disappear. Is there a limit to the amount of negative free margin you can accumulate or something before the app or trading account closes the open orders you have that are causing you deficit? I am used to trading stocks where you can hold onto a stock even if it's price drops way less than you had originally bought it for. Why can I not hold orders open indefinitely like I can on the stock market no matter the price change? This sucks, I lost all my money I put it, in fact I am -$88USD... Please someone explain to me what happened and what I did wrong?
 
Jahve Russell:

What is a Margin Call?


Contact your broker for more specific info. 

Margin Call
Margin Call
  • www.investopedia.com
A margin call occurs when the value of an investor’s margin account falls below the broker’s required amount. An investor’s margin account contains securities bought with borrowed money (typically a combination of the investor’s own money and money borrowed from the investor’s broker). A margin call refers specifically to a broker’s demand that...
 
Jahve Russell:
I am trading EFEUSD on the MetaTrader 4 app on Android. I am new to trading crypto and just put 500USD into my account to trade with. I had 4 open "sell" orders for ESEUSD but then the price of the ESEUSD I was trading skyrocketed above the price I had originally placed my orders and thus my free margin went -$600+ (obviously not enough to pay back), but then I checked my orders and they had just disappeared? I understand that the app (or was it my trading account?) may have closed my orders before my free margin went further into negative but couldn't I have just held and kept the orders open until the price of the EFEUSD dropped below my original "sell" order price and then closed the order with profit, thus increasing my free margin back to positive??? Why did they have to cancel my orders automatically? I could've waited for the price of the EFEUSD to go back down (which it does, it fluctuates everyday) and made the profits back? It doesn't make sense for them to get cancelled or disappear. Is there a limit to the amount of negative free margin you can accumulate or something before the app or trading account closes the open orders you have that are causing you deficit? I am used to trading stocks where you can hold onto a stock even if it's price drops way less than you had originally bought it for. Why can I not hold orders open indefinitely like I can on the stock market no matter the price change? This sucks, I lost all my money I put it, in fact I am -$88USD... Please someone explain to me what happened and what I did wrong?

Before trading anything, please first learn the basics of trading and about risk management by paper trading (i.e. "demo account").

What happened was that you placed your trades based only on the required margin, but did not calculate your required risk of price movements into loss (i.e. stop-loss risk).

So when the trade went into the red, it reduced your free margin and got stopped out. All brokers have a call out and a stop out limit. If you violate stop out limit, all trades are closed.

You lost all your money, not because it "sucks", but because you did not invest in your trading education first.

On a side note, please also read the following ...

Forum on trading, automated trading systems and testing trading strategies

Tips to avoid being scammed …

Fernando Carreiro, 2022.06.07 14:40

Be it by fake agents, brokers, signals, or EAs, there is one weapon to beat them all — knowledge! Your knowledge is the key to prevent you from being scammed.

Invest and take time to improve your knowledge, to gain experience and improve your skills. Learn to do things for yourself and not to rely on others so much. You don’t have to be a master or even be very good at it, but the more you know and understand, the easier it will be for you to detect when something is not what it seems to be.

Learn how brokers work and how they are licensed and regulated. Learn about the different markets, trading conditions, types of accounts, leverage, and when you don’t understand something, ask first about it and get answers from different sources. Don’t just blindly accept things.

Learn to trade manually, even if you intend to use signals or EAs. You don’t have to be very good at it, but you need to understand all the different concepts of how orders are placed, how they are triggered, how to manage them, how to calculate and manage your risk, and all those pesky little details required to trade manually. Only then can you better evaluate the signals you wish to follow or the EAs you wish to use.

If you are going to hire someone to code your EA for you, then take some time to understand how coding works and some basic knowledge about it. Again, you don’t have to be good at it, but the more you understand, the easier it will be for you to communicate with the developer and provide valid, realistic requirement specifications and to understand how much work is involved as well as its value and how much to budget.

Also, learn to use the Strategy Tester properly and how to interpret the results. The better you understand it, and the more you use it, the easier it will be for you to evaluate the results from EAs you are considering.

So, in conclusion, don’t be a greedy idiot quick to jump onto anything “shiny”. Instead, be wise. Take your time. Invest in your knowledge and skills. Choose carefully.

 
Fernando Carreiro #:

Before trading anything, please first learn the basics of trading and about risk management by paper trading (i.e. "demo account").

What happened was that you placed your trades based only on the required margin, but did not calculate your required risk of price movements into loss (i.e. stop-loss risk).

So when the trade went into the red, it reduced your free margin and got stopped out. All brokers have a call out and a stop out limit. If you violate stop out limit, all trades are closed.

You lost all your money, not because it "sucks", but because you did not invest in your trading education first.

On a side note, please also read the following ...

Ok, understood. I will first invest in my trading education before actually investing a single penny. Haha, a rookie mistake. I guess I was just getting caught up in the high of the constant dopamine hit I was receiving from the little bit of initial profit I was making from the small transactions beforehand and jumped headfirst into it without first understanding the fundamentals of investing. I didn't know what free margin even was or that it was a thing before the price of the crypto I was trading skyrocketed and it was too late. A painful mistake but luckily I didn't invest any further money and end up losing that too. Thanks for your help, I'll check out the material you have provided. My only question is, my account is now in negative, -88USD, what happens now? Do I have to deposit more funds to at least get that to neutral 0USD and if I don't will I get penalized?? I don't know how it works.
 
_MAHA_ #:

What is a Margin Call?


Contact your broker for more specific info. 

Thanks. Will do.
 
Jahve Russell #: Ok, understood. I will first invest in my trading education before actually investing a single penny. Haha, a rookie mistake. I guess I was just getting caught up in the high of the constant dopamine hit I was receiving from the little bit of initial profit I was making from the small transactions beforehand and jumped headfirst into it without first understanding the fundamentals of investing. I didn't know what free margin even was or that it was a thing before the price of the crypto I was trading skyrocketed and it was too late. A painful mistake but luckily I didn't invest any further money and end up losing that too. Thanks for your help. My only question is, my account is now in negative, -88USD, what happens now? Do I have to deposit more funds to at least get that to neutral 0USD and if I don't will I get penalized?? I don't know how it works.

A negative balance is usually a "red flag" that the broker may not be very reputable, because all reputable brokers I know don't ever let you go below a balance of "0.00" (there are exceptions for special accounts).

Always make sure your broker is licensed, regulated and has an acceptable reputation among other traders. There are websites that have that sort of information. Search on google. Don't discuss brokers here. It's against the rules.

As for the negative balance, you will have to read up on your broker's policy, but make sure you verify the points above — licensed and regulated.

 
Fernando Carreiro #:

A negative balance is usually a "red flag" that the broker may not be very reputable, because all reputable brokers I know don't ever let you go below a balance of "0.00".

Always make sure your broker is licensed, regulated and has am acceptable reputation among other traders. There are websites that have that sort of information. Search on google. Don't discuss brokers here. It's against the rules.

As for the negative balance, you will have to read up on your broker's policy, but make sure you verify the points above — licensed and regulated.

Duly noted, thanks for your help.
 
Fernando Carreiro #:

A negative balance is usually a "red flag" that the broker may not be very reputable, because all reputable brokers I know don't ever let you go below a balance of "0.00" (there are exceptions for special accounts).

Always make sure your broker is licensed, regulated and has an acceptable reputation among other traders. There are websites that have that sort of information. Search on google. Don't discuss brokers here. It's against the rules.

As for the negative balance, you will have to read up on your broker's policy, but make sure you verify the points above — licensed and regulated.

I disagree. With all leverage products you can loose more then your investment. This has nothing to do with reputation, it is just the way it works. Get some slippage with your stop out and voila your in the minus. The higher the leverage, the larger the minus. 

Some brokers offer negative balance protection, for EU brokers it is required, not sure about the rest of the world. I also disagree with this, it is the collective clients who will pay for this. Honestly i do not like to pay for other reckless traders, they should suffer the pain in order to learn, instead of being pampered and protected from themselves the EU likes to do. It is a matter of time before it is required to wear a safety helmet whilst trading.

End of rant.

 
Enrique Dangeroux #: I disagree. With all leverage products you can loose more then your investment. This has nothing to do with reputation, it is just the way it works. Get some slippage with your stop out and voila your in the minus. The higher the leverage, the larger the minus. Some brokers offer negative balance protection, for EU brokers it is required. I also disagree with this, not sure about the rest. But it is the collective clients who will pay for this. Honestly i do not like to pay for other reckless traders, they should suffer the pain in order to learn, instead of being pampered and protected from themselves the EU likes to do. It is a matter of time before it is required to wear a safety helmet whilst trading. End of rant.

Please note that I stated that it is a "red flag". I did not say that it was always the case. Reputable brokers usually stop you out before reaching 0.00, for example stop-out at 80%. So, it is quite rare for it to go negative. Yes, it can happen but it is rare.

So seeing it happen so easily is a "red flag" — meaning, it is a warning sign and requires more investigation to see if it is a "rare" case or if the broker makes a habit of it. Meaning that the OP needs to investigate the issue to see if it is a reputable case or not.

I also stated that the are exceptions for special accounts, namely accounts which allow for negative balance due to the good reputation of the trader or due to extra collateral provided by the trader.

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