Risk Disclosure for Leveraged Forex and CFD Trading
This page explains the risks that leveraged forex and CFD trading carries for readers of fgtabrokerae.com, an independent editorial resource that reviews FXGT and is not the broker, is not affiliated with the broker, and does not provide financial services, accounts, deposits, or advice.
Look at the sponsored brokerUnderstand How Leverage Multiplies Both Directions
This site takes on the obligation to state plainly, before anything else, that leverage is the single feature most likely to turn a trading decision into a loss larger than the amount committed. Leverage allows a trader to control a position far greater than the margin deposited, which means that a small move in the underlying price produces a large move in the account balance. The same mechanism that magnifies a gain magnifies a loss, and it does so symmetrically and without warning. A position that moves a fraction of a percent against a highly leveraged trader can erase the entire margin behind it.
It follows that the direction of the market matters as much as the size of the position, and that a trader who is right about direction but wrong about timing can still lose the whole deposit. This site does not present leverage as an opportunity and does not recommend any level of it. Readers should treat every leveraged position as capable of producing a total loss of the funds committed to it, and should assume that losses can arrive faster than any manual response.
Recognise That Protections Differ by Jurisdiction and Entity
The safeguards available to a retail trader depend on where the account is opened and which legal entity holds it, and those safeguards are not uniform. Negative balance protection, segregation of client funds, compensation schemes, and restrictions on leverage and on the marketing of CFDs are applied differently from one jurisdiction to another, and some jurisdictions apply none of them. An account held with an offshore entity may offer far weaker recourse than one held with an entity supervised in a stricter regime.
This site is an editorial resource and is not regulated, licensed, or endorsed by any authority, and it cannot tell a reader which protections attach to a given account. Readers must establish for themselves which entity would hold their funds, which regulator supervises that entity, and what protection, if any, would apply in the event of insolvency or a dispute. Where a contact route is needed, use the contact form on this site; this site does not operate accounts and cannot intervene in any broker relationship.
Expect Margin Calls and Automatic Closure
When the equity in an account falls toward the required margin, the broker may issue a margin call and may then close positions automatically, without further notice and at the prevailing market price. Automatic closure is a risk control, not a protection for the trader: it can crystallise a loss at the worst moment, and in fast or gapping markets the closing price may be considerably worse than the level that triggered it. Slippage of this kind is a normal feature of leveraged trading, not an exceptional event.
Readers should understand that they may have no opportunity to add funds, to reduce exposure, or to object before positions are liquidated. The timing and thresholds for margin calls and close-out are set by the broker and by the terms of the particular account, and they can differ between entities.
Weigh Past Results and Running Costs Carefully
Past performance says little about future results. Historical returns, backtests, and published track records describe conditions that have already passed and cannot account for the market state that will actually meet a live position. A strategy that performed well in one period may fail in the next, and the fact that a result has been achieved before is not evidence that it can be achieved again. This site does not present any track record as a guide to what a reader should expect.
Running costs erode returns continuously and are easy to underestimate. Spreads widen in volatile or thin conditions, overnight financing is charged on leveraged positions held past the daily cut-off, and commissions and currency conversion may apply on top. These costs are incurred whether or not a position is profitable, and over time they can consume a substantial part of an account. Readers should calculate the full cost of a position before opening it and should assume that costs will be deducted regardless of the outcome.
