Risk Disclosure: Leveraged Forex and CFD Trading
What you should understand before you open a leveraged position on any forex or CFD platform, including the broker reviewed on this site.
Costs at our partnerThe Cost of Holding a Position
Suppose you open a small position on a currency pair and the market moves against you by a fraction of a percent. On an unleveraged trade that would be a minor loss. On a leveraged CFD position it can wipe out a large share of what you put in, and the charges you pay along the way make the arithmetic worse. A spread is built into the price you receive on entry and the price you receive on exit, so every trade starts slightly behind. Overnight financing is charged on leveraged positions held past the daily rollover, and it accrues for as long as the position stays open. Some accounts also carry inactivity fees or conversion charges when your balance is held in a different currency from the instrument.
These costs are not incidental. They are continuous, and they apply whether the trade is winning or losing. A strategy that looks profitable on a chart of price movements alone may be unprofitable once spreads and financing are subtracted. Before trading, read the fee schedule published by the broker itself and work out what a typical holding period would cost you.
This site does not set those fees, does not receive your money, and cannot change or refund them. It is an editorial resource that reviews a broker for readers in Nigeria. It is not the broker, is not affiliated with the broker, and does not open accounts, accept deposits, or provide financial services or advice.
Leverage in Both Directions
Leverage lets you control a position larger than the cash you commit. That is its entire function, and it cuts both ways. If the market moves in your favour, the gain is calculated on the full position size, so it is magnified relative to your deposit. If the market moves against you, the loss is calculated the same way. A move of one percent against a position leveraged twenty times is a loss of roughly twenty percent of the margin committed to it. A move of five percent can exhaust the margin entirely.
When losses approach the margin, the broker may close the position automatically. That closing can happen at a price worse than the level you expected, particularly in fast markets, around major announcements, or when liquidity thins. You may lose more than you intended to risk on the trade, and in some jurisdictions you may owe money beyond your deposit. Leverage does not improve the odds of a trade being right. It only changes the size of the outcome.
Why Past Results Tell You Little
Charts, backtests and past performance figures describe what already happened under conditions that will not repeat exactly. A method that worked through one period of calm or one period of volatility may fail in the next. Currency markets are affected by interest rate decisions, political events, capital flows and sudden shifts in sentiment, and none of these can be forecast with reliability.
Past results also tend to leave out the costs described above, or to assume fills at prices that were not actually available. A track record on a demo account says nothing about how a strategy behaves with real money under real spreads. Treat any historical figure, whether from the broker, from a reviewer, or from your own testing, as a description of the past and not as evidence about the future.
Protection Varies by Jurisdiction
The safeguards that apply to a trading account depend on which legal entity holds it and where that entity is licensed. Client money rules, negative balance protection, compensation schemes and complaint procedures differ from one jurisdiction to another, and the same brand may operate through several entities offering different terms. An account opened under one entity may carry protections that an account under another does not.
Before depositing, establish which entity would hold your account, where it is established, and what protections attach to it. Read the client agreement and the risk warnings published by the broker. If a point is unclear, raise it with the broker directly. For matters concerning this site, use the contact form on this site. Nothing here is a substitute for the broker's own legal documents or for advice from a qualified professional who knows your circumstances.
