1. Leverage. Trades executed on trading accounts, are associated with high level of risk. Amount of initial margin for making a trade is greatly lower than minimum lot size on the interbank currency market, therefore every trade is executed with leverage. Relatively small movement of price of traded asset will affect your assets significantly. Leverage is a double-edged sword – it can work in your favor as well as against you. You can lose your deposit and other assets deposited for margin maintenance. If price of traded asset will move against your position, leading to increased margin requirements, you may be asked to maintain your margin level and to deposit additional funds. In case you refuse to do that, your position may be closed with a loss.
2. Orders for risk limitation. Orders for limiting risks, for example – "Stop Loss" or "Stop Limit" may not be effective if market conditions will not allow to execute order at a price set in the order
ADDITIONAL RISKS, COMMON FOR FOREX
3. Commissions and other fees. Before you start making trades, you have to find out what commissions, payments and other costs may be required from you. These costs will affect your final profit or may increase your loss.
4. Currency risks. Your overall profits and losses will depend on fluctuations of currency quotes.
5. Ways of executing trades. Currency market is not highly regulated, therefore to make a trade buyer and seller have no need to meet each other. Liquidity for trading is provided in automatic mode electronically, quotes and price are changed due to changes in liquidity as a result of an auction process. Most electronic trading platforms are fully automatic. But like any other technology, such systems may be fragile to possible breakdowns. You should contact firm that you are dealing with on detailed instructions for such cases.
6. Electronic trading. Trading in electronic trading platform may not only differ from trading on interbank currency market, but also differ from other trading platforms. If you make trades through electronic trading platform, you take risk associated with this platform including possible breakdowns. As a result, your order may not be executed properly.RISKS THAT COPYFX MEMBERS ACCEPT:
7.1 An Investor agrees with the fact that participating in CopyFX system is associated with risks. An Investor fully accepts risk of possible losses, that can occur as a result of activity of a Trader during the chosen Offer.
7.3 An Investor accepts risk of the fact that execution price of orders on this account may differ from execution price on account of a Trader. The Company doesn’t compensate a possible difference in profit/loss and commission for such transactions.
7.4 An Investor accepts risks associated with the fact that a Trader may not have a license confirming his qualification.
7.5 An Investor accepts risks of possible losses due to the fact that Trader may partially close his position and it will lead to closing current position and instant opening of new position on the account of an Investor. The new position on the account of an Investor will be of equal relative size to the position of Trader.
7.6 An Investor accepts risks that the total margin requirements for accounts of a Trader and an Investor may differ.
7.7 An Investor accepts possible risks of losses or lost profit that may occur due to rounding of values when using flexible settings of volume during copying of transactions of a Trader.
7.8 An Investor accepts risk of possible losses or lost profit that may occur due to incorrect settings of copying, as well as inability to edit settings after connecting to Trader’s Offer.
8.1 A Trader accepts the fact that participating in CopyFX system is associated with risks. A Trader is responsible for trading operations on his account and accepts all risks according to the Client’s Agreement and the conditions of the Offer he chose. A Trader performs trading operations on his own behalf, on his own account, and at his own risk.
8.2 A Trader accepts risks of the fact that Investor may not have enough experience and knowledge that may affect results of trading on Investor’s account and Trader’s commissions.
8.3 A Trader accepts risks of non-receiving the total amount of commission because of the fact that an Investor may not have sufficient funds for performing such operation. The Company bears no responsibility and doesn’t compensate the difference in commission in such cases.