Risk Disclosure: Leveraged Forex and CFD Trading
What this page covers, what it does not, and the specific risks you should understand before trading through any broker reviewed on this site.
Partner deposits and payoutsWhat does this page cover and what does it not?
This page explains the main risks of leveraged foreign exchange and contracts for difference trading. It is written for readers of etrxinvestae.com, an independent editorial resource that reviews the broker eToro for readers in the United Arab Emirates. It is not a substitute for the broker's own legal documents, and it is not personal advice.
This site is not the broker. It does not open accounts, accept deposits, place orders, hold client money, or provide financial services. It is not affiliated with the broker and is not regulated, licensed or endorsed by any authority. Nothing here should be read as a recommendation to trade or to open an account with any firm.
What happens if my account falls below the margin requirement?
Leverage lets you control a position much larger than the cash you put up. That cuts both ways. If the market moves against you, losses are calculated on the full position size, not just your deposit. Your margin is the buffer that keeps the position open.
When your equity falls toward the required margin, the broker may issue a margin call. In practice this is often a notification rather than a phone call. If equity keeps falling past the broker's threshold, the broker can close positions automatically, without asking you, at the prevailing market price. That closure can lock in losses.
You can lose more than your initial deposit if the broker's terms allow negative balance exposure, and even where negative balance protection applies, it depends on the entity and jurisdiction. Check the exact thresholds and the order in which positions are closed in the broker's documents.
How do gaps, slippage and news events affect my orders?
Forex and CFD prices do not move in a continuous line. Around major economic releases, central bank decisions, political events and market opens, prices can jump from one level to the next with no trading in between. A stop-loss order set at a certain price may be filled well beyond it.
Slippage is the difference between the price you expected and the price you received. It is most common in fast markets and in less liquid instruments. Gaps can also push a position straight through a stop level, so the loss is larger than the amount you planned to risk.
Leverage magnifies both effects. A gap on a leveraged position can wipe out a large part of your equity in minutes. No stop-loss order guarantees the price at which it executes, and no risk management tool removes the possibility of loss.
How many retail accounts lose money, and what costs will I pay?
Brokers in many jurisdictions publish the percentage of retail investor accounts that lose money when trading CFDs. That figure is usually high, often well above half. Treat it as a warning, not a statistic about you. It reflects the combined effect of leverage, costs and the difficulty of predicting short-term prices.
Running costs erode returns even when the market moves in your favour. The spread is the difference between the buy and sell price, and it is charged on every trade. Overnight financing is applied to leveraged positions held past the daily cut-off, and it can add up over weeks. Inactive account fees, conversion charges and wider spreads in volatile periods add further drag.
Costs are disclosed in the broker's fee schedule. Read it line by line and model how they affect your typical holding period before you trade.
Does investor protection depend on where I am and which entity I use?
Yes. The same brand may operate through different legal entities in different jurisdictions, each with its own regulator, client money rules, compensation scheme and complaint process. The protection you receive depends on which entity holds your account, not on the brand name.
Compensation schemes, where they exist, are usually capped and cover only specific situations. They are not insurance against trading losses. Negative balance protection, segregation of client funds and dispute resolution also vary by entity.
Check which entity your account agreement names, which regulator supervises it, and what protection applies to you as a resident of the United Arab Emirates. Past results say little about the future: markets change, and a strategy that worked before can fail next month. Trade only with money you can afford to lose, and seek independent advice if you are unsure.
