Last updated: October 25, 2026
Trading foreign exchange (forex), contracts for difference (CFDs) and crypto assets carries a high level of risk and is not suitable for everyone. You can lose some or all of the money you invest, and with some products you can lose more than your initial deposit. Please read this page before acting on anything published on ForexToolsApp.
Educational content only
Everything on forextoolsapp.com is published for general information and educational purposes. It is not investment, financial, legal or tax advice. It is not a recommendation to buy, sell or hold any currency, cryptocurrency, security or other financial instrument.
Our articles do not take into account your objectives, financial situation or needs. Before making a financial decision, consider whether it is appropriate for you and, where necessary, get advice from a qualified and properly regulated professional.
Risks of forex and CFD trading
Forex and CFDs are usually traded on margin. A small deposit controls a much larger position, so a small price move produces a proportionally larger gain or loss on your account. A move against you can use up your margin quickly and lead to a margin call or to your positions being closed automatically.
Regulators in several jurisdictions, including the European Union and the United Kingdom, require CFD providers to publish the percentage of their retail client accounts that lose money. Those disclosed figures are consistently high. Check the current disclosure of any provider you are considering.
Other risks to understand before you trade:
- Leverage. Trading on margin magnifies losses as much as it magnifies gains.
- Volatility and price gaps. Prices can jump past your stop-loss level, especially around economic releases, central bank decisions and the weekend open. A standard stop-loss order does not guarantee the price at which you exit.
- Costs. Spreads, commissions, overnight financing (swap) charges and currency conversion fees reduce returns and add up over time.
- Counterparty risk. When you trade CFDs or over-the-counter forex, your broker is often the other side of your trade. If the broker fails, your ability to recover funds depends on its regulation and on any compensation scheme that applies.
- Liquidity. In fast or thin markets, orders may be filled at a worse price than expected or not filled at all.
Risks of crypto assets
- Extreme volatility. Crypto prices can rise or fall sharply within hours, and large drawdowns have happened repeatedly.
- Limited protection. In many countries crypto assets are not covered by deposit insurance or investor compensation schemes, and many platforms operate with lighter oversight than banks or regulated brokers.
- Custody and security. Exchanges can be hacked, suspend withdrawals or become insolvent. If you hold your own private keys and lose them, your assets are usually gone for good.
- Irreversible transactions. Funds sent to the wrong address or to a scammer generally cannot be recovered.
- Regulatory change. Rules on crypto trading, taxation and stablecoins are changing in many countries and can affect whether an asset is available to you and what it is worth.
- Fraud. Fake exchanges, schemes promising guaranteed returns, impersonation of well-known people and pump-and-dump schemes are common in this market.
Past performance and examples
Charts, historical data, backtests and worked examples on this site are there to illustrate ideas. Past performance is not a reliable indicator of future results. Hypothetical or simulated results have built-in limitations: they are prepared with the benefit of hindsight and do not reflect real execution, slippage or the pressure of trading with real money.
Accuracy and third-party information
We work to keep our content accurate and current, but markets, prices, regulations and provider terms change, and mistakes can happen. Information may be incomplete or out of date by the time you read it. Always confirm important details, such as fees, margin requirements or a provider’s regulatory status, directly with the provider and the relevant regulator.
A mention of a broker, exchange, platform or tool is not an endorsement. Links to third-party websites are provided for convenience, and we are not responsible for their content or services.
Your responsibility
You are solely responsible for your trading and investment decisions and for following the laws that apply to you, including your tax obligations. Only trade with money you can afford to lose.
To the fullest extent permitted by law, ForexToolsApp and its contributors accept no liability for any loss or damage arising from the use of information published on this site. See our Terms of Use for more detail.
Questions about this disclaimer can be sent to [email protected].