Leverage allows traders to control large notional amounts with relatively small deposits. While this can amplify gains, it equally amplifies losses. A leverage ratio of 1:100 means a 1% adverse move can wipe out your margin deposit entirely.

Margin is the amount of capital required to open and maintain a position. If your equity falls below the maintenance margin, your broker may issue a margin call or automatically close positions, often at unfavorable prices.

Example: With $10,000 and 1:100 leverage, you can open a $1,000,000 position. A 0.5% move against you equals a $5,000 loss, 50% of your account, in minutes.

Regulatory restrictions vary: ESMA caps retail leverage at 1:30 in Europe; the U.S. allows 1:50 for majors; offshore jurisdictions may allow 1:500 or more. Higher leverage increases your risk of rapid account depletion.

• Never fully utilize maximum leverage available.
• Maintain free margin of at least 30–50% to avoid forced liquidations.
• Regularly stress-test your portfolio with adverse market scenarios.

Forex markets are influenced by multiple unpredictable factors: interest rate changes, unemployment reports, inflation data, and geopolitical tensions. Even with analysis, price moves can be sudden and irrational.

Market shocks can render technical or fundamental forecasts unreliable. For example, during the COVID-19 outbreak in March 2020, FX volatility surged and correlations across asset classes broke down, leading to unpredictable price behavior.

Traders must accept that unexpected events may result in losses far exceeding initial risk parameters. Stop-losses are not guaranteed protection in highly volatile or illiquid markets.

Liquidity is not constant. During off-hours or around news releases, spreads may widen, slippage may increase, and orders may be rejected or filled at worse prices.

Example: A stop-loss on GBP/USD at 1.2000 may execute at 1.1970 during a flash crash, resulting in a larger-than-expected loss.

Limit orders, guaranteed stops (if offered), and trading during peak liquidity can reduce execution risk but cannot eliminate it entirely.

Trading platforms depend on technology. Power outages, internet disruptions, or software bugs can delay order placement or execution. Even a short disruption during high volatility can cause severe losses.

You are responsible for ensuring your own internet connectivity, device security, and backup arrangements. Brokers are not responsible for losses caused by technical failures beyond their control.

Always keep a backup device, a mobile trading app, and broker’s emergency dealing desk phone number accessible.

Regulations differ across jurisdictions. Protections such as negative balance protection, segregated accounts, or compensation schemes may not apply in your country.

Authorities may impose leverage restrictions, restrict trading on certain instruments, or intervene in FX markets directly.

Ensure that you understand your local regulations, reporting obligations, and tax liabilities.

Automated systems, trading robots, or quantitative models are built on assumptions that may fail under real market conditions. Backtests often overfit past data and may not perform in live markets.

A strategy that worked during one volatility regime may fail during another. Blind reliance on indicators, signals, or third-party systems can lead to losses.

Forex and CFD gains may be taxable in your jurisdiction. Tax treatment varies depending on whether trades are considered speculative, hedging, or professional income.

You are responsible for filing and paying all taxes. Consult with a tax professional before engaging in trading.

Emotional biases such as fear, greed, and overconfidence often lead to poor decision-making. Revenge trading after losses, or overtrading during euphoric gains, can quickly wipe out accounts.

Maintain discipline, follow a trading plan, and use journaling to track mistakes.

Professional traders employ strict controls: maximum drawdown limits, stop-loss rules, and portfolio diversification. Retail traders should adopt similar discipline.

Use demo accounts to test strategies, and deploy capital only after thorough preparation.

- Swiss Franc unpeg (2015): Liquidity collapse caused widespread broker insolvencies. - Oil crash (2020): Negative oil prices caused margin blowouts. - GBP flash crash (2016): Sterling fell 10% in minutes due to algorithmic flow.

You are solely responsible for understanding all risks, setting your own trading parameters, and managing your capital responsibly.

By trading, you confirm that you have read, understood, and accepted these risks.

If you experience service issues, contact our support team immediately. Formal complaints may be lodged via our website, by email, or in writing. Complaints will be handled in line with our regulatory obligations.

By trading with DeLux FX, you acknowledge that you have carefully read and understood this Risk Disclosure. You accept full responsibility for all trading decisions, and you confirm that you are financially able to bear such risks.

Glossary

Margin Call: Request for extra funds when equity falls below required margin.

Stop Out: Automatic closure of positions when equity is insufficient.

Slippage: Difference between expected and executed price.

Drawdown: Peak-to-trough decline in account equity.

Checklist

• Have I set a risk limit per trade?
• Do I diversify positions?
• Do I track swap costs?
• Do I understand jurisdiction protections?