Risk Disclosure for Leveraged Forex and CFD Trading
This page explains the risks that come with leveraged forex and CFD trading, for readers of this independent review site.
Visit the partner brokerStart With a Concrete Case
Suppose you open a trade with 1,000 dirhams of your own money and a leverage of 1:100. You control a position worth 100,000 dirhams. If the market moves 1% against you, you lose 1,000 dirhams. That is your entire deposit, gone on a single percent move. If the market moves 1% in your favour, you double your money. This is the arithmetic that makes leveraged trading attractive and dangerous at the same time.
Now generalise. Every leveraged position works this way. The broker does not take the market risk; you do. Your loss can reach your deposit quickly, and in some cases it can exceed it if the market gaps and the broker cannot close your position in time. Nothing in this disclosure is advice to trade or not to trade. It is a description of what you are exposed to when you do.
This site reviews VT Markets for readers in the United Arab Emirates. This site is not the broker, is not affiliated with the broker, and does not provide financial services, accounts, deposits or advice. Any decision to open an account is yours, and it is made with the broker directly.
Understand What You Pay While the Trade Runs
Leveraged forex and CFD trading carries running costs that accumulate whether or not the trade is profitable. The spread is the difference between the buy and sell price, and it is charged on entry and effectively on exit. On quiet markets it can be narrow; around news releases, at market opens and in thin liquidity it can widen sharply, and that widening is a cost you bear.
Overnight financing is another running cost. If you hold a leveraged position past the broker's daily cut-off, you pay or receive an amount based on the difference between the two interest rates involved, plus the broker's markup. Over weeks and months, financing can quietly erode a position even when the price has not moved much against you. Other costs may include commissions on certain account types and currency conversion charges when your account currency differs from the instrument's.
None of these costs is hidden in the sense of being unlawful, but they are easy to overlook when you focus on the entry price. Add them up before you judge whether a strategy works. A trade that looks marginally profitable on price alone may be a losing trade once spreads and financing are counted.
Check Which Entity and Which Protections Apply
Brokers often operate through several legal entities in different jurisdictions, and the protections you receive depend on which entity holds your account. Client money rules, compensation schemes, leverage caps and dispute resolution procedures can differ substantially from one jurisdiction to another. A scheme that covers clients of one entity may not cover clients of another, and the amount of any compensation is usually capped.
This site does not claim that any particular protection applies to you. It cannot, because the answer depends on the entity named in your account agreement and on the rules of the regulator that oversees it. Read the client agreement and the risk disclosure the broker provides, and identify the exact entity you are contracting with before you deposit funds. If a protection scheme is described, check its limits and its scope in the documents themselves rather than in marketing material.
Face the Numbers and Trade Only What You Can Lose
Regulated brokers in several major markets publish the share of their retail accounts that lose money on CFDs. That figure is commonly between 70% and 80%, and sometimes higher. It is not a prediction about you, but it is the base rate you are trading against, and it exists because leverage amplifies losses as readily as gains. A small adverse move can wipe out a large share of your capital, and a run of them can end your account.
Leverage multiplies both directions. It does not create an edge; it only scales the outcome of whatever edge or mistake you bring. Position sizing matters more than leverage settings, because the size you choose determines the loss you take when the market moves against you. Money you need for rent, school fees, debt repayment or emergencies does not belong in a leveraged account.
Use only money whose complete loss would not change your life. If you are unsure whether you can afford that loss, you cannot. If you have questions about this page, use the contact form on this site. This site does not open accounts, accept deposits or give advice, and it does not endorse any broker.
