Risk Disclosure for Leveraged Forex and CFD Trading
Read this before you act on anything you find on this site, because leveraged products can cost you more than you expect.
Check the partner's termsStart With Your Own Position
You are reading an independent editorial resource about a broker, not opening an account with us. We do not hold your money, execute your orders, or manage your positions. Everything below describes risks that sit with you once you decide to trade leveraged forex or contracts for difference through any provider.
Leverage lets you control a position far larger than the cash you set aside. That is the whole point of it, and it is also the source of most of the damage. Before you go further, be clear about what you can genuinely afford to lose without changing how you live.
Protection Varies by Jurisdiction
Client money protection, dispute resolution, and compensation arrangements depend on which legal entity you sign with and where that entity is licensed. The same brand can operate through different entities in different countries, and those entities can offer different safeguards.
What applies to a client in one jurisdiction may not apply to you in Australia. Before depositing, check which entity would hold your account, which regulator supervises it, and what compensation, if any, would be available if that entity failed. Do not assume that a familiar name means a familiar level of protection.
Most Retail Accounts Lose Money
Providers of leveraged products are generally required to publish the share of retail client accounts that lose money when trading with them. Those figures are usually high, and they are not a formality. They reflect the real experience of ordinary retail traders, not a worst-case scenario.
Treat any published loss percentage as a starting point for your own judgment, not as a number that applies to someone else. If most accounts lose, the default outcome is a loss, and you should plan on the assumption that you may join that group.
Past Results Prove Little
A strategy that worked last month, or a track record someone shows you, says very little about what happens next. Markets change, volatility shifts, and the conditions that produced past gains may not return. Short runs of good results are common and are often explained by luck rather than skill.
Be sceptical of any presentation of performance that does not account for costs, drawdowns, and the period over which it was achieved. Your own future results depend on decisions you have not made yet, in conditions nobody can predict.
Margin Calls and Forced Closure
Leveraged positions must be supported by margin. If the market moves against you and your equity falls below the required level, the provider may issue a margin call and require you to add funds. If you do not, or cannot, the provider may close your positions automatically, at a time and price you do not choose.
Automatic closure can lock in losses and can happen quickly in fast markets. In some circumstances, and depending on the provider and the terms you accepted, losses can exceed your deposit and you may owe money beyond what you put in. Understand the closure rules before you trade, not after.
Running Costs and Leverage Both Ways
Spreads, commissions, overnight financing, and currency conversion all reduce your return, and they accumulate for as long as a position stays open. A strategy that looks profitable before costs may not be profitable after them. Check how each cost is charged and how it behaves when you hold positions overnight or through the weekend.
Leverage works in both directions. It magnifies gains and losses by the same multiple, and the losses can arrive faster than the gains. Trade only with money you can lose entirely without affecting your essential expenses, and treat any amount you commit as at risk from the moment you open a position.
This page is general information, not financial advice. We are not the broker, we are not affiliated with it, and we do not provide financial services. If you need personal advice, speak to a licensed adviser. To reach us, use the contact form on this site.
