XM Trading system adopts zero cut. By adopting the zero-cut system, even if a loss exceeding the effective margin of the trading account occurs due to sudden price fluctuations, etc., no additional call will be made, making it a fairly gentle system.
What kind of system is the zero cut system?
The “Zero Cut System” adopted by XMTrading is such that when a loss cut (forced liquidation) cannot be made in time due to sudden market price fluctuations, etc., and a loss exceeding the effective margin of the account occurs, XM will bear the burden. It’s a system that gives you money.
Zero Cut is a service that compensates you to zero even if your margin balance becomes negative. This means that even if you lose heavily due to market fluctuations, your account balance will not become negative. As stated on the management’s official website, all issues are activated after the amount becomes negative, so there is no risk of debt. Traders should first consider what to do next when the unrealized loss situation becomes large.
Features of Zero Cut
Zero cut will be uniformly zero, whether it is minus 100 yen or minus 1 million yen. It is the strongest ally for those who trade with high leverage (full leverage). There is no doubt that this is a blessing for traders as they do not lose more than their funds. By putting in additional funds, you can buy time and get further away from the zero cut. It is possible to avoid this by building multiple duplexes, which is safe. However, the disadvantage is that there is a risk that it will continue to go backwards.
Advantages of forex brokers
Are there any benefits for FX companies? The merchant puts the customer’s counter-order into the market and profits when the customer loses.
Businesses make a profit by charging a commission. That is the “spread” (the difference between the buy and sell prices). Therefore, for overseas traders, the more traders trade, the more profitable and profitable it is. There is such a mechanism because we want you to trade for a long time even if you misread the market and take zero cut relief measures.
Meaning of introducing zero cut
Even if it is minus 10,000 yen or minus 1 million yen, the contractor will easily make it zero. Why can such services continue?
The reason is that we take a small transaction fee from each trader. The profit in one transaction is small, but the trader always makes a profit.
Timing of loss cut compensation
In XM Trading, if the zero cut is made, it will be compensated to zero at the time of deposit. For example, if you deposit 30,000 yen when the negative balance is 100,000 yen, it will not be minus 70,000 yen, but the margin balance will be plus 30,000 yen.
Margin call comes first
Steps must be taken before zero cuts are adopted. First, a margin call is activated. A margin call means a warning. This system is the same at other companies such as axiory and exness. If you are trading with a large amount of leverage, it is dangerous in terms of safety, so consider cutting your loss or investing additional funds. It is very dangerous to do it in large and expensive lots, so you need to make a decision quickly.
Loss cut operation
If you leave the margin call unattended, the stop-loss cut will be activated. This will force a settlement and result in a large drawdown. Once a point is reached through automatic operation, there is no resistance to price movements. Scalping orders with new units using economic indicators is risky. It really has a big impact, and depending on the situation, it can be self-destructive.
Zero cut adopted
In general, it would be fine if the stop-loss cut is adopted, but because some economic indicators move too rapidly, the balance may become negative before the stop-loss cut is activated. At this time, zero cut is activated. The points here are bonuses, campaigns, XMP points, etc. XM has a cushion function, so if there is only a bonus remaining, the zero cut will not work.
Supports all account types
XM’s zero cut system supports all account types provided by XM: “Standard account”, “Micro account”, “KIWAMI pole account” and “Zero account”. It is also clearly stated on the XM website that we will not request additional margin.
Conditions that will not result in zero cut
XM does not use zero cut if the following conditions are met. Users need to think about how to operate the service on their own until the full amount is processed. This is a situation where your knowledge will be tested.
bonus left
XM has a cushion function. Zero cut will not be executed if bonus (credits) remain. Please keep in mind that the zero cut will only be applied if the equity margin including bonuses (credits) is negative. The cushion function is introduced in the article below.
Open positions
When trading with XM, zero cut will not be applied if there are open positions. Even if the account balance is negative, if there is unrealized profit on unsettled positions, the effective margin will be positive. If the zero cut does not occur, please check if you have a position in the same account.
Prohibited matter
As introduced in the article below, there are some prohibited things in XM. If it violates the prohibitions, zero cuts will not be adopted in the first place. Please be aware that transactions that abuse zero cuts will not be protected. It is introduced in the article below.
When will the zero cut be activated?
By the way, at XM, zero cut is not applied the moment your account becomes negative. Zero cuts are usually executed several hours to one business day after the account balance becomes negative. Even if the account balance becomes negative, the zero cut will not be executed immediately. Therefore, it is better to wait until it reaches zero instead of making a deposit in a bad way.
Difference between zero cut and loss cut
Zero cuts and stop-loss cuts are executed at different times. A zero cut is executed when the account balance becomes negative, and a stop-loss cut is executed when the margin maintenance rate falls below the stop-loss cut level. The loss cut is set at 50%. Therefore, the structure and timing are completely different.
What should you do if you get zero cut?
If you get a zero cut with XM, your negative balance will be 0 yen. After confirming that the amount has reached 0, you can deposit again and start trading.
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