Understand the risks of trading
Crypto, futures and CFDs can lose value quickly, and leverage magnifies losses. The main risks of trading and practical ways to manage them.
Trading can lose you money, and with leverage or CFDs you can lose it quickly. Before you trade, make sure you understand the product, and only use money you can afford to lose.
Prices can move fast
Crypto prices can rise or fall sharply in a short time. Forex, indices, commodities and stocks also move on news and economic data. The price you see on the Markets page or in a terminal can change before your order fills, especially with a market order.
Leverage and liquidation
In the futures terminal you can open a position larger than the margin you put up. That leverage magnifies gains and losses alike. If the market moves far enough against you, your position can be liquidated: it's closed automatically and you lose money. Read Margin, leverage and liquidation before you trade futures.
CFDs
CFDs on forex, indices, commodities and stocks let you trade price movements without owning the underlying asset. They're complex products, and you can lose money quickly. See Trade forex, indices, commodities and stocks (CFDs) before you start.
Other risks to know about
- Earn rates change. The APRs on the Earn pages can change, and the value of the coins themselves can go up or down.
- Fees add up. Each order's estimated fee is shown in the order form before you place it, and frequent trading means more fees. See the fee schedule.
- Transfer mistakes. Crypto sent to the wrong address or on the wrong network may not be recoverable.
- Scams. Be wary of anyone who promises guaranteed returns, offers to trade for you, or asks for your password or funds.
Ways to manage your risk
- Read the Risk disclosure before you trade.
- Answer the suitability questionnaire honestly. The suitability questionnaire explains it.
- Start with small amounts while you learn how the terminals work.
- Use limit orders to control the price you pay. See Order types: market and limit.
- Use lower leverage, and keep an eye on any open futures positions.
- Don't trade money you need for essentials, and don't borrow to trade.
- Keep your account secure. See Keep your account and funds secure.