Risk Disclosure: Leveraged Forex and CFD Trading
Before you open a position through any broker reviewed on this site, make sure you understand what can go wrong, because with leverage it can go wrong quickly.
Try the partner brokerWhat happens if my position moves against me?
When you trade forex or contracts for difference with leverage, you post only a fraction of the position's value as margin. The broker holds the rest as a conditional obligation. If the market moves against your position, your equity falls, and once it drops below the level the broker requires, you receive a margin call. A margin call is a warning, not a rescue. You may be asked to add funds within a short window, sometimes hours or minutes.
If you do not add funds, or if the market moves faster than you can react, the broker can close your positions automatically. Automatic closure is usually triggered at a set percentage of your margin, and it protects the broker's exposure, not yours. Your positions may be liquidated at the worst possible moment, and the resulting loss can exceed your initial deposit. With some brokers, you can owe more than you put in. Read the margin and stop-out terms in the broker's client agreement before you trade, and treat them as the first thing you need to understand, not the last.
How many retail traders actually lose money?
Brokers in many jurisdictions publish the share of retail accounts that lose money on CFDs. The figures commonly sit between 70 and 80 percent, and they are not a marketing accident. They reflect the maths of leverage, costs and human behaviour over time. A minority of accounts end up profitable over the reported period, and a smaller minority stay profitable across years.
You should assume you are in the majority until you have evidence otherwise, ideally from a long track record on a demo account and then a small live account. This site reviews a broker's offering; it does not and cannot tell you whether you personally will make money. Any review, however careful, is not a prediction about your results.
What costs will I pay while a trade is open?
Leveraged trading is not free to hold. You pay a spread on entry and exit, which is the difference between the buy and sell price, and it widens when markets are thin or volatile. If you hold a position overnight, you pay or receive financing, calculated on the leveraged value of the position. That charge accrues every day the trade stays open, and on a leveraged position it can quietly eat into any gain.
There may be commissions on some account types, currency conversion costs if your account is not in the instrument's currency, and inactivity fees if you stop trading for a while. These costs apply whether you win or lose. A strategy that looks profitable in a backtest can turn negative once spreads and overnight financing are applied. Add them up for your typical holding period before you decide the trade is worth taking.
Why can't I rely on past performance, and what are gaps and slippage?
Past results, whether a broker's published statistics, a strategy's backtest, or your own winning streak, say little about what happens next. Markets change regime, volatility shifts, and a method that worked in one period can fail in another. A good month is not evidence of skill, and a bad month is not proof of bad luck.
Prices do not always trade continuously. Around news releases, central bank decisions and market opens, a price can jump from one level to another, leaving a gap. Your stop-loss order may then be filled at a worse price than you set, which is slippage. During fast markets, liquidity can thin and spreads can widen sharply, and automatic closure may happen at a level you did not expect. Size positions so that a gap or a slippage event does not wipe out your account, and never risk money you cannot afford to lose. If you have questions about this disclosure, use the contact form on this site.
