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Risk warning

Leveraged Forex and CFD trading involves a high risk of capital loss. Read this warning before opening an account.

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1. Main warning

Trading foreign exchange (Forex) and contracts for difference (CFDs) carries a high level of risk and may not be suitable for all investors. Before trading these products, carefully consider your investment objectives, your level of experience and your risk tolerance.

Trading CFDs involves a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. You can lose some or all of your initial investment: do not invest money you cannot afford to lose.

2. Risks specific to Forex

The currency market is the most liquid in the world, but also one of the most volatile. Price moves can be sudden, especially:

  • when major economic indicators are released (employment, inflation, GDP);
  • when central banks announce monetary policy decisions;
  • during unexpected geopolitical events;
  • during periods of low liquidity (between sessions, holiday periods).

3. Risks specific to CFDs and leverage

CFDs are leveraged derivatives, just like margin Forex. This means that:

  • A small initial outlay gives you exposure to a much larger amount. With 50:1 leverage, allowed by CIRO on the main currency pairs, a $1,000 deposit can give you exposure to a $50,000 position.
  • Losses can exceed the initial deposit if the broker does not offer negative balance protection. Always check this protection with your broker.
  • Overnight financing fees (swap) can add up quickly and reduce your gains on positions held for several days.

4. Results of retail accounts

Most retail investors who trade CFDs lose money. Figures vary by broker and by period, but the proportions published by brokers in jurisdictions where this disclosure is mandatory generally range from 65% to 85% of retail investor accounts losing money.

Past performance is not a guarantee of future results.

5. Protection offered by Canadian regulation

Brokers that are members of CIRO and the CIPF offer greater protection than unregulated brokers or brokers based in offshore jurisdictions:

  • CIRO: ongoing supervision, disclosure obligations, capital rules and segregation of client funds;
  • CIPF: protection up to $1 million per account category if a member broker becomes insolvent;
  • Leverage limits: maximum leverage is regulated by instrument.

This protection concerns the soundness of your broker and the segregation of your funds. It does not protect you against losses resulting from your trading decisions.

6. Our site is not financial advice

ForexBrokers.ca is an information and comparison platform. Our content is editorial and educational in nature. It does not constitute a personalized recommendation, investment advice or a solicitation to invest.

7. Consult an independent professional

Before making any investment decision, consult:

  • a financial advisor duly registered with the securities regulator of your province or territory;
  • a tax professional, to understand the tax implications of your trades;
  • your broker, for any question about how it operates and its fees.

8. Rules of prudence

  • Only trade with capital you can afford to lose.
  • Start with a demo account before moving to real money.
  • Keep leverage moderate and learn to manage your risk per position.
  • Always use stop-loss orders.
  • Do not let emotions take over after a loss (revenge trading).
  • Keep learning about the markets and instruments you trade.
  • Check your broker's CIRO authorization before making any deposit.

9. Protection against fraud

In Canada, dealers that offer Forex and CFDs to retail clients must be registered with the securities regulators and be members of CIRO. Always check a broker's authorization before opening an account, with our Scam Broker Shield or directly on the CIRO website.

10. Contact us

For any question about this warning: