Risk Disclosure for Leveraged Forex and CFD Trading
Understand the real costs, the likelihood of loss and the limits of protection before you trade.
Demo with our partnerStart with a concrete loss to see how leverage works
Imagine you open a position worth 100,000 US dollars with 5,000 dollars of your own money. That is twenty times leverage. If the market moves one percent against you, the loss is 1,000 dollars, or a fifth of your capital. If it moves five percent against you, the loss is 5,000 dollars and your account is wiped out. The same arithmetic works in your favour when the market moves your way, but the loss side arrives faster because you can lose more than you deposited when gaps and slippage push the price past your stop.
This is not a hypothetical warning about extreme events. It is the ordinary mechanics of leveraged forex and contracts for difference. Every position you open with borrowed exposure carries this two-sided arithmetic, and the broker's terms will usually require you to cover any deficit beyond your initial deposit. Leverage is not a tool that improves your odds; it is a tool that scales the size of every outcome, good and bad.
This page explains the risks that matter most to readers in the United Arab Emirates who are considering HFM. It is written by an independent editorial resource, not by the broker. We do not open accounts, take deposits, place trades or give personal advice.
Recognise how spreads and financing erode your balance
Every trade starts behind. The spread, which is the difference between the buy and sell price, is a cost you pay on entry, and it widens when liquidity thins around news releases, market opens and quiet periods. A strategy that looks profitable on a chart of closing prices can lose money once the spread is applied to every round trip.
Overnight financing adds another running cost. If you hold a leveraged position past the daily cut-off, you pay or receive an amount based on the difference between the two interest rates involved, plus the broker's markup. Holding a position for weeks or months can turn a modest edge into a loss, and the cost is easy to overlook because it appears in small daily deductions rather than a single visible fee.
Other charges may include commissions on certain account types, currency conversion when your account base differs from the instrument's currency, and inactivity or withdrawal fees. Read the broker's cost schedule and calculate the total cost of a typical trade before you decide that a strategy is viable. Costs are certain; returns are not.
Treat past performance as history, not as a forecast
Charts showing a strategy's gains over the last year tell you what happened under one set of market conditions. They do not tell you what will happen next. Currency markets shift with central bank policy, geopolitical events, liquidity conditions and the behaviour of other participants, and a method that worked in a trending market can fail badly in a range-bound one.
Backtests and historical results also suffer from hindsight. They are often run with perfect knowledge of which prices were available, without the spread widening, the rejected orders or the slippage that real trading involves. A record produced on a demo account is not evidence of skill, because demo fills are typically cleaner than live ones.
Past results say little about the future. Any decision to trade should rest on your own understanding of the instruments, your tolerance for loss and your financial circumstances, not on a track record that belongs to someone else.
Accept that most retail accounts lose money
Regulators in several markets require brokers to publish the share of retail accounts that lose money when trading contracts for difference. Those figures commonly sit between seventy and eighty percent, and sometimes higher. The exact number varies by broker, by entity and by period, but the direction is consistent: the majority of retail traders lose.
This is not a comment on any individual's intelligence or effort. It reflects the combination of costs, leverage and the difficulty of predicting short-term price movements. A minority of accounts profit over a given period, and a smaller minority do so consistently after costs.
You should assume you are in the majority until you have evidence, produced over a meaningful period and after all costs, that you are not. Do not treat a run of winning trades as that evidence.
Trade only with money you can afford to lose
The money you commit to a trading account should be money whose complete loss would not change your life. It should not be rent, savings set aside for emergencies, borrowed funds, or money you may need within the next few years. Leveraged products can lose the entire deposit and, depending on the broker's terms and the jurisdiction, may leave you owing more.
Set a limit on what you are willing to lose before you open the account, and treat that limit as spent. Do not add funds to recover a loss. Do not use credit cards or loans to top up a margin call.
If you are unsure whether you can afford the loss, you cannot afford the trade. This site does not provide advice on whether trading is suitable for you; that assessment is yours, and it should be honest.
Expect gaps, slippage and violent moves around news
Prices do not always trade at the level you chose. Around major economic releases, central bank decisions, elections and unexpected geopolitical events, liquidity can disappear and the market can jump from one price to another without trading in between. A stop-loss order becomes a request to close at the next available price, not a guarantee of that price.
Slippage means your order fills worse than you expected. Gaps mean the market opens beyond your stop, producing a larger loss than planned. In fast conditions, orders may be rejected or filled in parts. These outcomes are normal in leveraged markets and are not errors by the broker.
Size positions so that a gap of several times your usual stop distance would not be catastrophic. Avoid holding large exposure through scheduled news if you do not understand how the instrument has behaved in past releases.
