General warning
Trading financial instruments involves risk. You may lose part or all of your invested capital. Past performance of a financial instrument is not a reliable indicator of its future performance.
Leveraged products and CFDs
CFDs (contracts for difference) and other leveraged products are complex instruments. Leverage works in both directions: it multiplies losses exactly as it multiplies gains.
Brokers in the EU and UK must publish the share of their retail accounts that lose money trading CFDs. At most providers this figure is well above 60%, and above 80% at some. The current figure is shown on each broker's own website.
Retail clients in the EU are subject to leverage caps (30:1 on major currency pairs, 5:1 on shares) and mandatory negative balance protection. Both fall away if you elect professional status or trade with a broker outside that supervision.
Currency risk
If you trade instruments denominated in a currency other than your account currency, you also carry exchange rate risk. A share can rise and the position still end up down.
Crypto assets
Crypto assets are highly volatile and only partially regulated in many jurisdictions. Custody is generally not covered by any investor compensation scheme. If the trading platform fails, the capital committed can be lost entirely.
Provider risk
Choosing the broker is itself a risk. What matters is the quality of supervision, segregation of client from company money, and a statutory deposit or investor compensation scheme. Coverage differs substantially:
| Jurisdiction | Investor compensation (securities) |
|---|---|
| United Kingdom (FSCS) | up to GBP 85,000 |
| EU (minimum standard) | up to EUR 20,000 |
| Germany (EdW) | 90%, max EUR 20,000 |
| United States (SIPC) | up to USD 500,000, of which max USD 250,000 cash |
| Australia, New Zealand, Singapore | no general compensation scheme |
Offshore licences (Seychelles, Belize, Vanuatu, St Vincent) generally carry no compensation scheme at all.
Tax risk
Investment income is taxable in most countries. With a foreign broker you usually have to handle the declaration yourself. Failure to do so can result in back taxes and penalties.
Not advice
Brokaro provides no investment advice. The content of this site takes no account of your personal financial situation, investment objectives or capacity to bear risk.
Only invest amounts whose total loss you could absorb. If you do not fully understand a product, do not trade it. When in doubt, seek independent qualified advice.
Updated: 21 August 2026