Risk disclosure
Leveraged trading is one of the fastest ways to lose money that retail markets offer. This page is not a formality - read it before you use anything else on BrokaBoy.
CFDs and leveraged forex are complex instruments and carry a high risk of losing money rapidly due to leverage. The majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money.
1. The majority of retail accounts lose money
Regulators across the UK, EU, Australia and South Africa require CFD providers to publish the percentage of their own retail client accounts that lose money. Those published figures have consistently sat in the high-60s to high-80s percent range across the industry.
Exact loss percentages vary by broker, by entity and by reporting period, and each broker is required to disclose its own current figure on its own website and in its marketing. BrokaBoy does not restate those percentages, because a stale number is worse than no number. Use our broker profiles - where the fee breakdown, account types and regulated entities for each provider are summarised - and then confirm the broker's live loss-rate disclosure on its own site before you deposit anything.
2. How leverage magnifies losses
Leverage lets you control a position far larger than your deposit. A broker offering 1:500 means $200 of margin can control a $100,000 position. The critical point is that leverage scales losses exactly as it scales gains: on that position, a 0.2% adverse move wipes out the entire $200.
Because of this, positions can be closed out by a margin call in minutes during volatile news, gaps over the weekend can open beyond your stop-loss level, and slippage can fill you at a materially worse price than the one you saw. Overnight swap charges erode leveraged positions the longer they are held.
Read the full explanation in our glossary: Leverage, alongside Margin Call, Slippage and Negative Balance Protection.
3. Other risks you are taking on
- Market risk. Prices move against you, sometimes violently and without warning around economic releases.
- Counterparty risk. A CFD is a contract with the broker, not an exchange-traded asset. If the entity fails, you are a creditor of that entity, and compensation cover differs sharply by regulator.
- Entity risk. A global brand may onboard you to an offshore entity with weaker protections than its headline regulator suggests. Check which entity your account is actually with - see our regulator hub.
- Liquidity and execution risk. Spreads widen and orders may not fill at requested prices in thin or fast markets.
- Currency risk. Trading in a currency other than your own adds exchange-rate exposure on top of the position itself.
- Technology risk. Platform outages, connectivity failures and automated-strategy errors can leave positions unmanaged.
- Cost drag. Spreads, commissions, swaps, inactivity fees and withdrawal charges compound against you over time.
4. BrokaBoy does not give financial advice
BrokaBoy provides general information and comparison content only. Nothing on this site is personalised financial, investment, tax or legal advice, and nothing here is a recommendation to buy, sell, hold or trade any instrument, or to open an account with any particular broker.
Our ratings compare providers against a published, uniform set of criteria. They say nothing about whether trading is appropriate for you, your income, your obligations or your risk tolerance. Only trade with money you can afford to lose entirely, and never with funds needed for living costs, debt repayment or dependants.
Before trading, consult a licensed financial advisor who is able to assess your personal circumstances.
5. Note for South African users - FAIS boundaries
In South Africa, giving financial advice or rendering intermediary services in respect of financial products is regulated under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS) and requires authorisation by the Financial Sector Conduct Authority (FSCA).
BrokaBoy is not an authorised Financial Services Provider and is not a representative of one. We deliberately operate outside the FAIS advice perimeter: we publish factual, comparative and educational content about brokers, and we do not furnish advice or recommendations of a financial product to any specific person, nor do we render any intermediary service.
If you want advice that takes your own circumstances into account, deal with an FSCA- authorised FSP and confirm its licence number and category on the FSCA register. Derivative CFDs offered by locally licensed providers are typically issued under an ODP licence - verify this before depositing.
6. Affiliate relationships
Some outbound broker links on BrokaBoy are affiliate links and may earn us a commission. This never changes the price you pay and never influences our scoring. The full disclosure sits on our Methodology page.