Forex and CFDs involve market risk. Leverage can amplify gains and losses, and you may lose some or all of the money you deposit.
Risk management begins before a trade: understand your account conditions, position size and the loss you can afford to accept.
Only use funds you can afford to risk
Do not use money needed for daily living, repayments or essential commitments. A smaller deposit can still be lost.
- Separate trading funds from essential money
- Know the maximum amount you could lose
- Avoid decisions based on urgency or fear
Leverage and position size work together
Leverage affects margin requirements, while position size determines the monetary effect of a price move. Both need to be considered.
- Check margin requirements
- Set position size before placing an order
- Understand stop-out rules
Terms can change
Instrument specifications, leverage limits and funding rules may change. Confirm current information in the client area and official terms.
Frequently asked questions
Q. Can I lose more than my deposit?
A. The treatment of negative balances depends on the broker, entity and terms. Check the applicable policy; losing your deposit remains possible.
Q. Does leverage create profit?
A. No. It changes the margin needed for a position and can magnify the effect of price movements.
Sources and conditions
FX Textbook is edited from official platform documentation, broker-published information and applicable terms where available. Account conditions, services and rules can change. Confirm the current terms in the broker's registration flow before you act.
FX Textbook is an independent information site, not a broker or provider of personal investment advice. Forex and CFDs involve risk. You may lose some or all of your invested capital. No trading result is guaranteed.
NEXT STEP
Next: understand margin and stop-out
Review how margin level and stop-out can affect an open position.