Risk Disclaimer

What leverage actually does

Leverage is borrowed margin, not a discount on risk. At 1:100, $1,000 of your own money controls a position of roughly $100,000. A 1% move against that position is $1,000 — the whole account — and the broker can close it before you get a chance to decide. Lower leverage reduces the margin you must post; it does not reduce the loss on the position itself.

Costs you pay whether you are right or wrong

Every trade starts slightly behind. The spread is paid on entry, commission is charged on both sides where the account has it, and positions held overnight are charged financing (swap). None of that depends on the trade working. In a strategy with a small average edge, costs are not a detail — they can be most of the result.

Gaps, slippage and stops

A stop-loss is an instruction, not a guarantee. Prices can jump between the moment the stop triggers and the moment an order fills, so the realised loss can be larger than the one planned. Weekend gaps, central-bank decisions and thin liquidity around holidays are the usual reasons. It is also why a stop sitting exactly on a round number is not the same as a stop that respects how far price normally travels.

Broker and counterparty risk

With CFDs the broker is the counterparty. Check who regulates them, whether client money is held in segregated accounts, what the withdrawal terms are, and whether the entity you signed with is the one covered by a compensation scheme. A polished platform run by an unregulated entity is still a risk position.

A five-line check before any trade

• Risk is a fixed percentage of the account — commonly 1%, rarely more than 2%.
• The stop is placed before entry, from the chart, not from the lot size you would like.
• Position size is calculated from the stop, the way the position size calculator does it.
• The cost of the trade — spread, commission, swap — is known before it is opened.
• The economic calendar has been checked for anything that can gap the pair.

If you are trading to solve a money problem

Leverage makes losses feel recoverable, and that is exactly when accounts are lost. If trading is being used to make rent, repay debt or win back a previous loss, stop and speak to someone independent — a financial adviser or a debt service in your country. No calculator can size a trade that should not be taken.