Risk warning

1. Main warning

Trading foreign exchange (Forex) and contracts for difference (CFDs) carries a high level of risk and may not be suitable for all investors. Before trading these products, carefully consider your investment objectives, your level of experience and your risk tolerance.

2. Risks specific to Forex

The currency market is the most liquid in the world, but also one of the most volatile. Price moves can be sudden, especially:

• when major economic indicators are released (employment, inflation, GDP);
• when central banks announce monetary policy decisions;
• during unexpected geopolitical events;
• during periods of low liquidity (between sessions, holiday periods).

3. Risks specific to CFDs and leverage

CFDs are leveraged derivatives, just like margin Forex. This means that:

• A small initial outlay gives you exposure to a much larger amount. With 30:1 leverage, the maximum allowed for retail clients on major currency pairs under FCA, ESMA and ASIC rules, a $1,000 deposit can give you exposure to a $30,000 position. Offshore entities may offer 500:1 or more, which multiplies the risk.
• Losses can exceed the initial deposit if the broker does not offer negative balance protection. Always check this protection with your broker.
• Overnight financing fees (swap) can add up quickly and reduce your gains on positions held for several days.

4. Results of retail accounts

Most retail investors who trade CFDs lose money. Figures vary by broker and by period, but the proportions published by brokers in jurisdictions where this disclosure is mandatory generally range from 65% to 85% of retail investor accounts losing money.

Past performance is not a guarantee of future results.

5. Protection offered by regulation

Brokers supervised by recognized regulators offer greater protection than unregulated brokers or brokers based in offshore jurisdictions:

• Tier-1 regulators (FCA, ASIC, CFTC and NFA, MAS, JFSA, CIRO): ongoing supervision, capital rules, disclosure obligations and segregation of client funds;
• Compensation schemes: for example the FSCS in the United Kingdom (up to GBP 85,000) or the Investor Compensation Fund in Cyprus (up to EUR 20,000), if an eligible firm becomes insolvent;
• Leverage limits and negative balance protection: mandatory for retail clients in the UK, the EU and Australia.

The protection that applies to you depends on the group entity that opens your account, which usually depends on your country of residence.

This protection concerns the soundness of your broker and the segregation of your funds. It does not protect you against losses resulting from your trading decisions.

6. Our site is not financial advice

Brokers.Forex is an information and comparison platform. Our content is editorial and educational in nature. It does not constitute a personalized recommendation, investment advice or a solicitation to invest.

7. Consult an independent professional

Before making any investment decision, consult:

• a financial advisor duly registered with the financial regulator of your country;
• a tax professional, to understand the tax implications of your trades;
• your broker, for any question about how it operates and its fees.

8. Rules of prudence

• Only trade with capital you can afford to lose.
• Start with a demo account before moving to real money.
• Keep leverage moderate and learn to manage your risk per position.
• Always use stop-loss orders.
• Do not let emotions take over after a loss (revenge trading).
• Keep learning about the markets and instruments you trade.
• Check your broker's licence on the regulator's official register before making any deposit.

9. Protection against fraud

Scammers often pose as regulated brokers or claim licences they do not hold. Always check a broker's licence before opening an account, with our Scam Broker Shield or directly on the regulator's official register.

10. Contact us

For any question about this warning:

• Email: contact@brokers.forex
• Form: contact page