Last checked: 7 October 2026. General education for South African readers.
Forex and contracts for difference (CFDs) involve substantial risk. CFDs are complex products, and leverage can cause rapid losses. Do not trade money you need for everyday expenses, debt repayments or emergencies.
Leverage increases your exposure
Margin is the amount needed to support a position; it is not the maximum possible loss. A small market move can produce a large change relative to the money committed.
Illustration: A position with R20,000 of market exposure and R1,000 of margin has exposure equal to 20 times its margin. A 1% adverse move represents about R200 before charges: 20% of that R1,000. This simplified example ignores other account funds, margin rules, currency effects and execution costs. It is not a quote or a trading recommendation.
Positions may close before you expect
If equity falls below the account’s margin requirements, the provider may close positions. The threshold and calculation depend on the contract. Gaps and fast markets can cause execution at a different price from the one you expected.
A stop order is not always a guaranteed price
A standard stop loss can trigger an order without guaranteeing the final execution price. Check whether the provider offers guaranteed stops, which instruments qualify, the conditions and any extra charge.
Check loss protections for your actual account
Do not assume that a brand’s European account protections apply to an account held elsewhere. Confirm any negative balance protection in the agreement for the company serving you, including exceptions. Without an applicable protection, losses may exceed the money deposited.
Costs and other risks
- Spreads, commission and overnight charges can reduce returns or increase losses.
- Currency conversion can change the amount credited or withdrawn in rand.
- Liquidity, price gaps, outages and connection problems can affect execution and access.
- The provider’s financial position and custody arrangements matter. A licence does not guarantee that trading is safe or profitable.
- Demo results and past performance do not predict future live results.
Before opening an account
Read the client agreement, risk disclosure and fee schedule. Match the contracting company to the relevant official register and check its permissions. Ask the provider about anything unclear. If you need advice about suitability or your circumstances, consult an appropriately authorised professional.
FXJohn is a publisher, not a broker. We do not hold trading deposits, execute orders or provide personalised investment advice. Our calculator is an illustration of selected costs, not a prediction of profit or loss.
Sources and further reading
The EBA and ESMA investor warning explains core CFD risks. It is a European source; it does not establish the protections or leverage limits on a South African account. For local entity checks, use the FSCA’s official resources.
Related: Trading cost guide · ZAR account guide.