[Global GT, FXGT, Crypto GT] Advantages and disadvantages of zero cut

Crypto GT

Crypto GT uses a zero cut system. This system has great advantages for traders. Therefore, Crypto GT can be said to be a virtual currency exchange that can be operated from a trader’s perspective. Summary of zero cut.

What is zero cut?

A zero cut means a large unrealized loss due to sudden market fluctuations, and in some cases, the account balance may become negative. In this case, if the zero cut system is adopted, the negative amount will be compensated by the FX company or the virtual currency exchange and will be 0. In other words, traders will no longer have the risk of going negative and incurring debt. In other words, it can be said that it is a very useful system for traders.

Global GT, FXGT, Crypto GT adopt zero cut

Since Crypto GT uses a zero cut system, there is no risk of becoming a debt even if a sudden change in the market price occurs as described above and it becomes negative, so you can rest assured. This system is used not only in Crypto GT, but also in FXGT and Global GT, so it will be the same.

Cases in which a negative balance occurs

So the question is, how does a negative balance occur in the first place? It doesn’t happen that often, so I think a lot of people are concerned about it. Below is an example of this.

sudden market fluctuations

In recent years, there has been considerable anxiety around the world, and the risk of war has increased, and the situation is dangerous. For example, when there is a political change or a shocking interest rate policy announcement, the market changes suddenly at a frightening pace. When such cases occur, there are many cases where forced loss cuts are delayed. If the chart fluctuates greatly in an instant during the few seconds until the loss cut is processed, the loss cut will not be in time and the account balance will be negative.

too many lots

If you put in too many lots even though your funds are very small, the forced loss cut will be triggered at the timing when the chart fluctuates greatly in an instant, but it will fluctuate in a few seconds as shown above. If the loss cut is not made in time, the account balance will be negative.

Will negative balances occur?

Negative balances do happen. According to a tally by the Japan Financial Futures Trading Association, there have been thousands of such incidents in Japan alone. In this way, no matter how much automation has progressed in society, it will not be able to keep up with rapid changes.

Minos balance
Apple Shock20196,389
China Shock20154,820
Swiss franc shock20151,137

Source : 金融先物取引業協会

Is Zero Cut Advantageous for Brokers?

Looking at the zero cut system, it looks like an advantage for the trader.

sense of security

The fact that the zero cut system is adopted means that there is no debt. As a result, brokers can attract more traders. And it will also result in a dramatic increase in the number of users who actively trade, which will be profitable.

litigation risk

If the zero cut system is not adopted, if there are many users who have a negative balance and cannot make money, they will have to file lawsuits one by one. By adopting the zero cut system, there is an advantage that such wasteful work can be cut.

Conditions for triggering zero cut

The last thing you should know is that the zero cut is triggered only when the account balance becomes negative and the bonus is gone. Since there is a cushion function, the zero cut will not be activated unless you lose all the bonuses. The bonus can only be used for trading and cannot be withdrawn, but it is also a great service that allows you to increase your trading funds.