Risk Disclosure: Leveraged Forex and CFD Trading
What you should understand before you open a leveraged position, written for readers of this independent review site.
What our partner offersWhat costs will I pay while a position stays open?
Most readers arrive here after comparing account types and spreads, so it makes sense to start with the money that leaves your account even when the market barely moves. A spread is the difference between the price at which you can buy and the price at which you can sell. It is built into every trade, and on quiet markets it may look small, but it is charged every time you enter and every time you exit. Frequent trading multiplies that cost quickly, and wider spreads around news releases or at the daily rollover can turn a modest edge into a loss.
Overnight financing is the other recurring charge. When you hold a leveraged position past the daily cut-off, a financing adjustment is usually applied to your account, and it can be positive or negative depending on the instrument, the direction of your position and prevailing interest rates. Positions held for days or weeks can accumulate financing costs that are far larger than the spread you paid to open. Some instruments also carry commissions or account-level fees, and the exact figures sit in the broker's own schedule, not on this site.
Swap rates, spread conditions and fee schedules can change, sometimes with little notice. Before you trade, read the current costs published by the broker itself, and treat any figure you see in a review, including ours, as a snapshot rather than a guarantee. If you do not understand how a charge is calculated, ask the broker through the contact form on its own website before you commit money.
What happens when the market jumps or a price I expected is not there?
Leveraged products react to fast markets in ways that surprise even experienced traders. Prices can gap: a market closes at one level and reopens at another, skipping the levels in between. A stop-loss order resting inside that gap may be filled at the next available price, which can be considerably worse than the level you set. The order did what it was designed to do, but the market did not offer the price you wanted.
Slippage works in a similar way during ordinary volatility. When you click to trade, the price you receive may differ from the price on screen, especially around scheduled data releases, central bank announcements, election results or unexpected geopolitical events. Liquidity can thin out in seconds, spreads can widen sharply, and orders may be rejected or partially filled. These conditions affect every participant, and no risk tool removes them entirely.
This matters because leverage means a small adverse move consumes a large share of your margin. A gap against your position can produce a loss that exceeds your initial deposit in extreme cases, depending on the broker's terms and the jurisdiction involved. Plan for the possibility that the fill you get is not the fill you expected, and size positions so that an unpleasant surprise does not wipe out funds you need for other purposes.
If trading has worked before, does that tell me anything about next month?
Past results, whether yours or anyone else's, describe what happened under conditions that no longer exist. A strategy that performed well in a trending market may fail in a range, and a run of profitable months says nothing about the next trade. Markets change, volatility regimes shift, and the costs you pay can rise while your approach stays the same.
Be cautious with track records shown in marketing material. They are usually selected after the fact, they rarely show the losing accounts, and they often omit the costs and the drawdowns that occurred along the way. A hypothetical or simulated result is not real money and does not reflect the emotional pressure of trading a live account.
Treat every forecast, signal and review, including anything published on this site, as information rather than a prediction. This site is an independent editorial resource. It is not the broker, it is not affiliated with the broker, and it does not provide financial services, accounts, deposits or advice. Any decision to trade is yours, and the outcome is yours as well.
How does leverage cut both ways, and when will my position be closed for me?
Leverage lets you control a position larger than the funds you set aside as margin. That magnifies profit when the market moves in your favour, and it magnifies loss when it moves against you by exactly the same factor. A one percent move against a position leveraged twenty times is a twenty percent hit to the margin backing it. There is no asymmetry here, and no setting that keeps the upside while removing the downside.
When losses reduce your account equity below the level the broker requires, you receive a margin call. This is a request, and sometimes an automatic process, to add funds or reduce your exposure. If equity falls further, the broker may close positions automatically, without asking you and possibly at the worst moment, to prevent the balance from going negative. Closure can happen at a loss larger than you intended, and it can happen while you are asleep or away from the screen.
You can reduce this risk by using lower leverage, keeping more free margin than the minimum, and avoiding positions you cannot monitor. None of these steps eliminates the risk of loss. If anything on this page is unclear, use the contact form on this site to ask a question, and read the broker's own risk documents before depositing any money.
