Land-FX (Land Prime) tends to focus on bonuses, spreads, and leverage in accounts, but there are zero cut and loss cut rules, so we will explain margin trading. If you do not know this, there is a risk that you will be cut off without knowing it, so it is better to know this. This article summarizes what the rules actually are.
What is loss cut? What does it mean?
Loss cut means forced settlement. Loss cut is a forced stop loss when a specified percentage is reached. The reason for a forced stop loss is to prevent further losses and a total loss, but in the case of Land-FX, it is triggered when the loss cut reaches 0, so when the loss cut is triggered, it effectively means a total loss. Be careful not to put in too many lots of currency. We recommend holding positions at 1% to 2% of the investment capital. Unlike in Japan, customers can use the company’s system for free and can use multiple accounts, so it is a high-level service.
What is margin call? What does it mean?
A margin call is an alert that notifies you when your margin maintenance rate is low and you are approaching a forced stop loss. It is just a warning, so nothing will happen immediately. However, when this warning arrives, traders must decide whether to put in additional funds or cut their losses. If you leave it alone, a stop loss will be triggered. Be careful when using tools to execute transactions on LANDFX. Be careful if you are managing a high lot size with automated trading when you start out.
How to calculate margin maintenance rate
We will introduce how to calculate the margin maintenance rate, which is the basis for the stop loss level. Margin maintenance rate = available margin ÷ required margin x 100. Available margin is calculated as account balance + profit and loss. Required margin is the amount of margin required per trade. Please note that the calculation of units will change depending on whether the base currency is USD or JPY. Be careful if you are an individual making new trades with the goal of a specific high leverage. Looking at the details, the leverage is greater than the transaction cost.
loss cut level
The margin maintenance percentages that result in stop loss and margin calls are as follows. There are differences depending on the account type. It is also mentioned on the management page. This system is similar to other companies, and is also introduced by XM, GemForex, TitanFX, Axiory, FXGT, ThreeTrader, Exness, etc. Stop loss actions are applied automatically and are implemented in the market without an application. Be careful with stocks with high liquidity such as precious metals and energy.
| Standard | Swap Free | ECN | |
| Margin Call | 30％ | 30％ | 50％ |
| Loss Cut | 0％ | 0％ | 30％ |
Margin maintenance rate is a number that shows how much margin your current position has relative to your account balance. If this ratio falls below 30%, the ECN account will be cut off. If this falls below 0%, standard accounts and swap-free accounts will also be subject to forced loss cuts.
Benefits of 0% loss cut level
In the latest Land-FX, the loss cut level is set to 0%. This can be said to be an unusual application compared to other brokers. So what are the benefits? It is very convenient for trading where you want to make as much unrealized profit as possible from pips through system trading or scalping. It can withstand large price fluctuations to some extent. It is easier to generate profits even with high leverage trades on currency pairs.
Forced stop-loss cuts can be avoided
Most FX brokers set the stop loss level at 50% or so, but setting it to 0% increases the chances of avoiding forced stop loss. On the other hand, it also means that if stop loss is triggered, you will lose the entire amount. The regulations are different from those of other financial services. Be sure to check the functions carefully.
Maximum capital efficiency
Zero stop-loss level means that you can use all your funds for trading, giving you more freedom. On the other hand, it means that there are no restrictions as traders can make any kind of trade depending on their decisions. Those with experience can make the most of the service and create a large amount of assets even if the investment amount is small. There are also promotions, which is advantageous.
able to withstand unrealized losses
It is easy to understand that the loss cut level is zero, and it has the advantage of being able to withstand unrealized losses to the limit even if you enter. This means that you can trade while being patient depending on the method and situation, which means that the range of detailed strategies in the market expands. A very important point is that even if you use EA, you will not be forced to settle immediately (loss cut).
What is zero cut?
Land-FX uses zero cut. Zero cut is a system where if your account balance becomes negative at some point, the broker will compensate you for the negative amount. There is no margin call, meaning there is no risk of chasing debts, so traders can rest assured that there is no risk. This means you can trade with confidence. Zero cuts are expected in the following situations:
economic indicators
Especially important economic indicators can cause large price movements. In such cases, there may be cases where the loss cut is not made in time, which may result in a big disadvantage. At this time, zero cut will be activated.
server down
The trading server may be down and the stop-loss cut may not work. At this time, there is a risk that you will have a big negative impact. The strength of the server is relatively strong, but if it goes down, there’s nothing you can do about it.
Zero cut activation order
Zero cut will not be activated suddenly. There is an order. Let’s take a look at the movement of platforms MT4 and MT5. As you place more orders, events will occur in the following order. If you use leverage of 200x or 500x, the risk will increase in both cases. Adjust the lot according to your current funds and trade.
margin call
The first thing to be triggered when unrealized losses increase is a margin call. A margin call is a warning, so I have never said anything about it, but it is a time when traders are forced to decide what to do.
loss cut
The next thing to be activated is a stop loss cut. There is nothing the trader can do as a stop loss will result in a forced settlement. All you can do is wait for the payment to be made.
zero cut
The activation condition for zero cut is after the loss cut is activated. The mechanism is that the zero cut is activated only when the loss becomes negative after the loss cut is activated.
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