Leveraged Forex and CFD Trading: Risk Disclosure
What this page covers, what it does not, and the risks you accept when you trade leveraged products.
Sponsor's funding methodsWhat does this risk disclosure cover, and what does it not?
This page explains the main risks of trading leveraged foreign exchange and contracts for difference. It applies to readers of fcmabrokerke.com, an independent editorial resource that reviews the broker FXCM for a Kenyan audience. The site is not the broker. It is not affiliated with the broker, it does not provide financial services, it does not open accounts or take deposits, and it does not give investment advice. Nothing here is a personal recommendation or an offer to trade.
This page does not describe the terms of any specific account, the pricing of any instrument, or the legal protections available to you. Those depend on the entity you would deal with and the law that governs it. It also does not assess whether leveraged trading suits you. That judgment is yours, and it should rest on your own circumstances, your income, your debts and your ability to absorb loss.
Read this page as a general warning, not as a substitute for the broker's own legal documents. Before you act, read the client agreement, the risk disclosure, the order execution policy and the fees schedule of the entity concerned, and take independent advice if you need it. If anything here is unclear, use the contact form on this site to ask, but understand that the answer cannot be advice.
Can I lose more than I expect when the market moves fast?
Leverage lets you control a position far larger than the money you set aside. That cuts both ways. A small move against you can wipe out a large share of your account, and a fast move can take it past zero. Prices do not always trade continuously. Markets gap over weekends, around central bank decisions, during economic releases and after unexpected political or geopolitical news. When a market reopens or liquidity thins, the first price available may be far from the last one you saw.
Slippage is the difference between the price you expected and the price you get. It is most likely when volatility is high, when many orders hit the market at once, or when liquidity is thin. Stop orders do not guarantee a price. A stop becomes a market order once triggered, and it fills at the next available price, which may be worse than your level. In extreme conditions, a stop may fill at a price you never anticipated, and the loss may exceed the amount you deposited.
Some brokers offer negative balance protection, but it is not universal, and its scope differs by entity and by jurisdiction. Where it is absent, you may owe money beyond your deposit. Treat gaps, slippage and news-driven volatility as normal features of these markets, not as rare accidents, and size positions so that a bad fill does not threaten your finances.
Why do past results tell me so little about the future?
Past performance is historical information. It describes what happened under conditions that will not repeat in the same way. A strategy that worked in a trending market may fail in a range, and a record built during calm months says little about behaviour during a crisis. Leveraged products magnify this uncertainty because the same percentage move produces a much larger change in your equity, and the sequence of wins and losses matters as much as the average.
Reviews, screenshots, trading histories and testimonials are selective by nature. They show outcomes, not the risk taken to reach them, and they rarely show the losses that came before or after. A run of profits can be consistent with a strategy that eventually loses everything. No record, however long or impressive, guarantees future results, and no one can promise you a return.
Treat any performance figure, including your own, as a description of the past and nothing more. Judge a decision by the risk it exposes you to, the costs you pay and whether you can survive the worst plausible outcome, not by how well it performed last month.
How much protection do I have, and how much should I risk?
The protection available to retail traders differs by jurisdiction and by the legal entity you contract with. Compensation schemes, dispute resolution arrangements, segregation rules and negative balance protection vary widely, and an entity in one country may offer far less than an entity of the same brand in another. A scheme that covers clients of one entity may not cover clients of another, and cross-border claims are often difficult. Do not assume that a familiar name means familiar protection. Check which entity would hold your account, which regulator supervises it and what compensation, if any, applies.
Regulators in several markets require brokers to publish the share of retail accounts that lose money on leveraged products. Those figures are usually high, and they are a better guide to the odds than any advertisement. They reflect real client outcomes after costs, and they show that most retail traders lose. Your result may differ, but you should start from the assumption that leveraged trading is difficult and that losses are the common outcome.
Trade only with money you can afford to lose entirely. Do not use funds set aside for rent, school fees, debt repayment, emergencies or retirement, and do not borrow to trade. Keep your positions small relative to your capital, set a limit on what you are willing to lose before you open a trade, and stop when you reach it. If a loss would change your life, the position is too large. This site does not provide advice, accounts or services, and it cannot recover losses; if you need guidance, speak to an independent, qualified professional.
