forex trading
- Thread starter samuelk
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Okay, now you got my attention. I admit I don't know much about FX other than I have my bank account and a brokerage account with them. In order to initiate any trade/order I have to load my depositor account, if it goes into zero I can't do anything but the account will never go in any negative balance.
What platforms are you guys talking about that make it necessary to have a corporation to trade FX as a person?
What platforms are you guys talking about that make it necessary to have a corporation to trade FX as a person?
Interesting! How can this be risky for a person doing personal FX trading through a bank? If we speak using the 3rd party and unregulated platforms I can imagine there is lot's of fraud and scams around but if you trade FX through a bank how can you loose more money than you have on your account?
That said, all business (even the simplest online business you can imagine) is risky and it's advisable to only do business in corporate form, means you setup a company to protect you from any liabilities.
That said, all business (even the simplest online business you can imagine) is risky and it's advisable to only do business in corporate form, means you setup a company to protect you from any liabilities.
Honestly you people should be more worried about the inherent risk of the actual FX trading activities rather than the business risk. I hope it make sense.
The risk is the availability of high leverage with forex trading. You can easily owe more than you have. Often you may get a margin call to either top up your positions with more cash or have a sell enforced. But high volatility and high leverage can see you blow straight past this leaving you owing also. Using a company structure (only for this purpose - do not use a company that has other operations or assets) can limit your exposure. If you end up owing more than you own, you have no personal (or other company) exposure. This company would become bankrupt but your︀ other assets are safe.
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