{ "url": "https://thetraderwiki.com/en/faq/", "canonical": "https://thetraderwiki.com/en/faq/", "html": "https://thetraderwiki.com/en/faq/", "markdown": "https://thetraderwiki.com/en/faq/index.md", "lang": "en", "dir": "ltr", "kind": "faq", "key": "faq", "title": "Frequently asked questions about CFDs", "h1": "Frequently asked questions about CFD trading", "description": "Twenty-five CFD questions answered briefly, with sources: the basics, costs, risk, the rules by regulator and getting started. Each answer stands alone.", "keywords": [ "CFD FAQ", "CFD questions answered", "can I lose more than I deposit CFD", "CFD leverage limits", "is CFD trading regulated" ], "published": "2026-09-05", "updated": "2026-10-12", "author": { "name": "Gabriel L.", "url": "https://thetraderwiki.com/en/authors/gabriel-l/" }, "publisher": { "name": "TheTraderWiki", "url": "https://thetraderwiki.com/" }, "riskWarning": "CFDs are complex, leveraged products, and the regulators’ own figures show that most retail accounts lose money. Nothing on TheTraderWiki is investment advice. Read the full risk disclosure, and if you’re unsure, talk to a qualified adviser. Broker details can change and they can be wrong. Before you open an account, confirm them with the broker and the regulator’s register.", "breadcrumbs": [ { "name": "Home", "url": "https://thetraderwiki.com/en/" }, { "name": "Guides", "url": "https://thetraderwiki.com/en/learn/" }, { "name": "FAQ", "url": "https://thetraderwiki.com/en/faq/" } ], "lead": [ "The twenty-five questions people most often bring to TheTraderWiki about CFDs, contracts for difference, are answered in this FAQ. The questions fall into five groups: the basics of the contract, its costs, its risks, the rules that apply and getting started. Each answer stands on its own, gives the source of any figure it depends on and links to the full page on that subject.", "Nothing in the answers is advice. Where a question asks what you should do, you’ll see the factors to consider and the arithmetic involved, but the choice is yours to make." ], "leadLinks": [ { "label": "CFDs", "url": "https://thetraderwiki.com/en/glossary/#cfd", "type": "internal" } ], "blocks": [ { "type": "faq", "id": "basics", "heading": "The basics", "url": "https://thetraderwiki.com/en/faq/#basics", "intro": [ "Basic questions about contracts for difference look at what the contract is and how it is different from owning shares. They also ask who you are trading against, whether you can lose more than you deposit, and whether the contract has an end." ], "items": [ { "id": "what-is-a-cfd", "question": "What is a CFD?", "url": "https://thetraderwiki.com/en/faq/#what-is-a-cfd", "answer": [ "A CFD, or contract for difference, is an agreement with a provider. You swap the difference between an asset’s price when you open the contract and its price when you close it, and you settle in cash. You never own the asset. The provider asks for only a margin deposit, a fraction of the trade’s full value, so the contract is leveraged. A small deposit gives you exposure to a much bigger amount of shares, indices, currencies, commodities or cryptocurrencies (what are CFDs)." ] }, { "id": "cfd-vs-shares", "question": "How does a CFD differ from buying shares?", "url": "https://thetraderwiki.com/en/faq/#cfd-vs-shares", "answer": [ "A CFD differs from buying shares in ownership, where it trades, cost and leverage. A share CFD gives you no ownership rights and no voting rights. It’s a contract with your provider, not a share bought on an exchange. Each night you hold it, a long trade pays financing, while a short trade may receive financing or pay it. The CFD is leveraged, so a small deposit controls a bigger position. Dividends appear as cash adjustments to your account and are not paid to you (what are CFDs)." ] }, { "id": "who-is-the-counterparty", "question": "Who is the counterparty to a CFD?", "url": "https://thetraderwiki.com/en/faq/#who-is-the-counterparty", "answer": [ "The other side of a CFD deal, known as the counterparty, is the provider. Because the contract is over the counter, no exchange is involved: the provider quotes the price, holds your deposit and pays you or collects from you when you close. An authorised provider that keeps segregated client money apart from the firm’s own funds limits the risk of that provider failing (choosing a provider)." ] }, { "id": "can-i-lose-more-than-deposit", "question": "Can I lose more than I deposit?", "url": "https://thetraderwiki.com/en/faq/#can-i-lose-more-than-deposit", "answer": [ "You can’t lose more than the money in your account if you’re a retail client and the company that opens your account is regulated in the EU or the UK. Most individual traders are retail clients. Negative balance protection caps your total account loss at the money in it (ESMA ESMA Decision (EU) 2018/796, FCA PS19/18). A single trade can still lose more than the margin held for it. A professional client can owe more than the balance. So can a customer of a company outside those rules. A global company in the same group applies its own regulator’s rules." ] }, { "id": "do-cfds-expire", "question": "Do CFDs expire?", "url": "https://thetraderwiki.com/en/faq/#do-cfds-expire", "answer": [ "Most CFDs don’t expire. A cash CFD stays open until you close it, or until the provider closes it under the close-out rule. That rule closes your trades when your account runs too low. For as long as it’s open, a cash CFD charges daily financing. CFDs based on futures do expire. Futures are exchange-traded contracts with a fixed end date, and the CFDs expire with their contract. The provider rolls them over to the next contract and makes a cash adjustment for the price difference (indices trading)." ] } ], "links": [ { "label": "margin", "url": "https://thetraderwiki.com/en/glossary/#margin", "type": "internal" }, { "label": "leveraged", "url": "https://thetraderwiki.com/en/glossary/#leverage", "type": "internal" }, { "label": "what are CFDs", "url": "https://thetraderwiki.com/en/what-are-cfds/", "type": "internal" }, { "label": "what are CFDs", "url": "https://thetraderwiki.com/en/what-are-cfds/#compared", "type": "internal" }, { "label": "counterparty", "url": "https://thetraderwiki.com/en/glossary/#counterparty", "type": "internal" }, { "label": "over the counter", "url": "https://thetraderwiki.com/en/glossary/#over-the-counter", "type": "internal" }, { "label": "segregated", "url": "https://thetraderwiki.com/en/glossary/#client-money-segregation", "type": "internal" }, { "label": "choosing a provider", "url": "https://thetraderwiki.com/en/choosing-a-provider/#client-money", "type": "internal" }, { "label": "retail client", "url": "https://thetraderwiki.com/en/glossary/#retail-client", "type": "internal" }, { "label": "the company that opens your account", "url": "https://thetraderwiki.com/en/broker-groups-and-regulators/", "type": "internal" }, { "label": "Negative balance protection", "url": "https://thetraderwiki.com/en/glossary/#negative-balance-protection", "type": "internal" }, { "label": "ESMA", "url": "https://www.esma.europa.eu/", "type": "source", "title": "European Securities and Markets Authority", "publisher": "ESMA" }, { "label": "ESMA Decision (EU) 2018/796", "url": "https://eur-lex.europa.eu/eli/dec/2018/796/oj", "type": "source", "title": "ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union", "publisher": "Official Journal of the European Union (EUR-Lex)" }, { "label": "FCA", "url": "https://www.fca.org.uk/", "type": "source", "title": "Financial Conduct Authority", "publisher": "FCA" }, { "label": "PS19/18", "url": "https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products-sold-retail-clients", "type": "source", "title": "PS19/18: Restricting contract for difference products sold to retail clients", "publisher": "FCA" }, { "label": "professional client", "url": "https://thetraderwiki.com/en/glossary/#professional-client", "type": "internal" }, { "label": "global company", "url": "https://thetraderwiki.com/en/offshore-brokers/", "type": "internal" }, { "label": "close-out", "url": "https://thetraderwiki.com/en/glossary/#margin-close-out", "type": "internal" }, { "label": "futures", "url": "https://thetraderwiki.com/en/glossary/#futures-contract", "type": "internal" }, { "label": "indices trading", "url": "https://thetraderwiki.com/en/indices-trading/#cash-vs-futures", "type": "internal" } ] }, { "type": "faq", "id": "costs", "heading": "Costs", "url": "https://thetraderwiki.com/en/faq/#costs", "intro": [ "Cost questions span the spread, overnight financing, commission, the weekend charge and the fees that don’t appear on the trade ticket." ], "items": [ { "id": "what-is-the-spread", "question": "What is the spread and how much does it cost?", "url": "https://thetraderwiki.com/en/faq/#what-is-the-spread", "answer": [ "The spread is the gap between the ask, the price you buy at, and the bid, the price you sell at. Every round trip costs you the full spread, since a trade opens on one side of the quote and closes on the other. The money cost is the spread times your trade size. A spread of 0.02 on 1,000 units costs 20. Measured against your margin, it’s much bigger than it looks measured against the price (costs and fees)." ] }, { "id": "how-is-overnight-financing-charged", "question": "How is overnight financing charged?", "url": "https://thetraderwiki.com/en/faq/#how-is-overnight-financing-charged", "answer": [ "Overnight financing is charged on every open trade at the provider’s daily cut-off. The yearly rate is a benchmark interest rate plus or minus the provider’s mark-up. Divide that by the number of days in the year to get a nightly charge. Financing is worked out on the notional value, the full value of the trade, not on your margin. Long trades pay the benchmark plus the mark-up. Short trades receive the benchmark minus the mark-up, and that becomes a charge when the mark-up is bigger than the benchmark (costs and fees)." ] }, { "id": "are-there-commissions", "question": "Are there commissions on CFDs?", "url": "https://thetraderwiki.com/en/faq/#are-there-commissions", "answer": [ "Commissions on CFDs show up mainly on share CFDs. They’re charged as a percentage of the trade’s value or a flat amount per share, and you pay them both when you open and when you close the trade. These commissions sit on top of the exchange spread. Index, currency and commodity CFDs usually come with a commission-free quote. The trade isn’t cheaper for it. The provider simply takes all of its pay through the spread (costs and fees)." ] }, { "id": "weekend-financing", "question": "Why is financing charged three times on one night?", "url": "https://thetraderwiki.com/en/faq/#weekend-financing", "answer": [ "Financing is charged three times in a single night to account for the weekend, when the underlying market is shut but your trade remains open. Most providers apply the triple charge on Wednesday for currency CFDs, and most apply it on Friday for other types. You still pay for seven nights in total over a week. The issue lies in the timing. If you hold a trade through the triple-charge night, you pay for more nights than the trade was actually held (costs and fees)." ] }, { "id": "hidden-fees", "question": "What fees do not appear on the trade ticket?", "url": "https://thetraderwiki.com/en/faq/#hidden-fees", "answer": [ "Fees that don’t appear on the trade ticket are charged at account level and include currency conversion mark-ups on profit, loss and sometimes margin. Inactivity fees on dormant accounts, withdrawal fees and market data fees also fall into this group. The provider’s terms set out each fee, and each belongs in any cost comparison (costs and fees)." ] } ], "links": [ { "label": "spread", "url": "https://thetraderwiki.com/en/glossary/#spread", "type": "internal" }, { "label": "overnight financing", "url": "https://thetraderwiki.com/en/glossary/#overnight-financing", "type": "internal" }, { "label": "costs and fees", "url": "https://thetraderwiki.com/en/costs-and-fees/#spread", "type": "internal" }, { "label": "notional value", "url": "https://thetraderwiki.com/en/glossary/#notional-value", "type": "internal" }, { "label": "costs and fees", "url": "https://thetraderwiki.com/en/costs-and-fees/#financing-formula", "type": "internal" }, { "label": "costs and fees", "url": "https://thetraderwiki.com/en/costs-and-fees/#commission", "type": "internal" }, { "label": "costs and fees", "url": "https://thetraderwiki.com/en/costs-and-fees/#weekend-charge", "type": "internal" }, { "label": "costs and fees", "url": "https://thetraderwiki.com/en/costs-and-fees/#other-fees", "type": "internal" } ] }, { "type": "faq", "id": "risk", "heading": "Risk", "url": "https://thetraderwiki.com/en/faq/#risk", "intro": [ "Risk questions ask why most accounts lose, what the close-out rule does, what a price gap is, whether a stop-loss is guaranteed and how much to risk on one trade." ], "items": [ { "id": "why-do-most-lose", "question": "Why do most retail CFD accounts lose money?", "url": "https://thetraderwiki.com/en/faq/#why-do-most-lose", "answer": [ "Leverage turns ordinary price moves into swings that are large beside the margin, and that is why most retail CFD accounts lose money. Costs are charged on the full trade value no matter which direction the price moves, while the close-out rule locks in losses at the worst moment of a move. National regulators found that between 74 % and 89 % of retail accounts were losing money, a result ESMA reported in 2018. Average losses per client ranged from €1,600 to €29,000 (ESMA press release, 27 March 2018). Now every company regulated in the EU or the UK publishes its own percentage in the standardised risk warning (risk disclosure)." ] }, { "id": "what-is-margin-close-out", "question": "What is margin close-out?", "url": "https://thetraderwiki.com/en/faq/#what-is-margin-close-out", "answer": [ "Margin close-out is the rule that makes a provider close some or all of your trades when your account runs too low, so losses stop at what’s in the account. For a retail account at a company regulated in the EU or the UK, that point is reached when equity falls to 50 % of the total initial margin for the open trades. The trades then close at the market price at that moment (ESMA Decision (EU) 2018/796, FCA PS19/18). Equity is your balance plus or minus the profit or loss on open trades. No margin call, a warning to add money, has to come first, unless the provider chooses to send one. A global company sets its own close-out level and terms (leverage and margin)." ] }, { "id": "what-is-gap-risk", "question": "What is gap risk?", "url": "https://thetraderwiki.com/en/faq/#what-is-gap-risk", "answer": [ "Gap risk is the chance that a price moves straight from one level to another without any trading in between. Such gaps usually occur when a market opens after news, or over the weekend. If your stop-loss lands inside the gap, it fills at the first available price on the other side, not at the level you picked. The risk is highest on single shares around company results and on indices over the weekend. A stop-loss doesn’t shield you from it (risk management)." ] }, { "id": "is-a-stop-loss-guaranteed", "question": "Is a stop-loss guaranteed?", "url": "https://thetraderwiki.com/en/faq/#is-a-stop-loss-guaranteed", "answer": [ "A stop-loss isn’t guaranteed. When an ordinary stop reaches its level, it turns into a market order and executes at the next available price. That price may, in a gap, be far past your stop level (stop-loss orders, how a trade works)." ] }, { "id": "how-much-to-risk", "question": "How much should I risk on one position?", "url": "https://thetraderwiki.com/en/faq/#how-much-to-risk", "answer": [ "How much to risk on one position is a rule you set before you open it. That risk is the share of your account you would lose if your stop is hit. The trade size comes from the risk amount and the distance to your stop, not from the margin the provider asks for. A drawdown is a fall in your account from its peak. A drawdown recovery table shows why people keep that share small. After losing half your account, you need to double what is left just to get back to where you started (risk management). TheTraderWiki doesn’t suggest a figure, and the risk management page has the arithmetic." ] } ], "links": [ { "label": "stop-loss", "url": "https://thetraderwiki.com/en/glossary/#stop-loss", "type": "internal" }, { "label": "ESMA press release, 27 March 2018", "url": "https://www.esma.europa.eu/press-news/esma-news/esma-agrees-prohibit-binary-options-and-restrict-cfds-protect-retail-investors", "type": "source", "title": "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors", "publisher": "ESMA" }, { "label": "risk disclosure", "url": "https://thetraderwiki.com/en/risk-disclosure/", "type": "internal" }, { "label": "ESMA Decision (EU) 2018/796", "url": "https://eur-lex.europa.eu/eli/dec/2018/796/oj", "type": "source", "title": "ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union", "publisher": "Official Journal of the European Union (EUR-Lex)" }, { "label": "FCA PS19/18", "url": "https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products-sold-retail-clients", "type": "source", "title": "PS19/18: Restricting contract for difference products sold to retail clients", "publisher": "FCA" }, { "label": "margin call", "url": "https://thetraderwiki.com/en/glossary/#margin-call", "type": "internal" }, { "label": "leverage and margin", "url": "https://thetraderwiki.com/en/leverage-and-margin/#margin-close-out", "type": "internal" }, { "label": "Gap risk", "url": "https://thetraderwiki.com/en/glossary/#gap-risk", "type": "internal" }, { "label": "risk management", "url": "https://thetraderwiki.com/en/risk-management/#stop-types", "type": "internal" }, { "label": "stop-loss orders", "url": "https://thetraderwiki.com/en/stop-loss-orders/#why-a-stop-fills-worse", "type": "internal" }, { "label": "how a trade works", "url": "https://thetraderwiki.com/en/how-cfd-trading-works/#order-types", "type": "internal" }, { "label": "drawdown", "url": "https://thetraderwiki.com/en/glossary/#drawdown", "type": "internal" }, { "label": "risk management", "url": "https://thetraderwiki.com/en/risk-management/#risk-per-trade", "type": "internal" } ] }, { "type": "faq", "id": "rules", "heading": "The rules", "url": "https://thetraderwiki.com/en/faq/#rules", "intro": [ "The questions on the rules ask about leverage limits, who regulates CFDs, where CFDs are banned, the difference between retail and professional clients and whether your money is protected." ], "items": [ { "id": "what-are-the-leverage-limits", "question": "What are the leverage limits for retail clients?", "url": "https://thetraderwiki.com/en/faq/#what-are-the-leverage-limits", "answer": [ "The leverage limits for retail clients of an EU or UK company are 30:1 for major currency pairs and 20:1 for non-major pairs, gold and major indices. They’re 10:1 for other commodities and non-major indices, 5:1 for individual shares and other reference values. On cryptocurrencies the EU limit is 2:1, while the FCA has banned firms in the UK from selling crypto CFDs to retail clients altogether (FCA PS20/10). A limit of 30:1 means a trade can be worth up to 30 times the margin you put down. Put as margin, the limits are 3.33 %, 5 %, 10 %, 20 % and 50 % of the trade’s value (ESMA Decision (EU) 2018/796, FCA PS19/18). Such a company may ask for more margin than the cap, but it may not accept less from a retail client. A global company in the same group sets its own leverage (leverage and margin)." ] }, { "id": "who-regulates-cfds", "question": "Who regulates CFDs?", "url": "https://thetraderwiki.com/en/faq/#who-regulates-cfds", "answer": [ "CFDs come under the national financial regulator in the country where the provider is authorised. In the UK, that regulator is the FCA. In the EU, it’s the national regulator. Examples include CySEC, BaFin, the AMF, CONSOB, the CNMV, the CMVM and the KNF. ESMA coordinates these EU regulators. It used its product intervention power, the power to restrict how a product is sold, to set the 2018 measures, which national rules later made permanent (ESMA product intervention). The major and offshore regulators section explains what a licence from a major regulator brings." ] }, { "id": "are-cfds-banned-anywhere", "question": "Are CFDs banned anywhere?", "url": "https://thetraderwiki.com/en/faq/#are-cfds-banned-anywhere", "answer": [ "Belgium is one place where CFDs are banned for consumers. Its regulator, the FSMA, prohibited their distribution through electronic platforms from 18 August 2016 (FSMA regulation). In the United States, CFDs aren’t available to retail customers in the form sold elsewhere. The CFTC treats off-exchange CFDs as unlawful retail commodity transactions (CFTC release 7809-18). Only CFTC-registered firms may offer off-exchange leveraged products to US retail customers. In the UK, firms can’t sell crypto derivatives to retail clients at all (FCA PS20/10). Elsewhere, each regulator sets its own rules (rules by country)." ] }, { "id": "retail-vs-professional", "question": "What is the difference between a retail and a professional client?", "url": "https://thetraderwiki.com/en/faq/#retail-vs-professional", "answer": [ "The difference between a retail and a professional client is that every retail protection applies to retail clients only. Those protections, at a company regulated in the EU or the UK, are the leverage caps, the close-out rule, negative balance protection, the ban on incentives and the risk warning. Under MiFID II, you can request professional status if you meet two of three tests (Directive 2014/65/EU). One test is an average of ten significant trades a quarter over the previous four quarters. Another is a portfolio of cash deposits and financial instruments above €500,000. The third is a year working in a relevant professional role. If you ask to be treated as a professional, you give up every one of those protections (becoming a professional client)." ] }, { "id": "is-my-money-protected", "question": "Is my money protected if the provider fails?", "url": "https://thetraderwiki.com/en/faq/#is-my-money-protected", "answer": [ "Your money is protected if the provider fails, through client-money segregation, when you use a company regulated in the UK or the EU. Segregation keeps your deposits apart from the firm’s own funds but doesn’t protect you against trading losses. At a company regulated elsewhere, such as a global company, the protection depends on its own regulator and its client agreement (choosing a provider)." ] } ], "links": [ { "label": "FCA PS20/10", "url": "https://www.fca.org.uk/publications/policy-statements/ps20-10-prohibiting-sale-retail-clients-investment-products-reference-cryptoassets", "type": "source", "title": "PS20/10: Prohibiting the sale to retail clients of investment products that reference cryptoassets", "publisher": "FCA" }, { "label": "ESMA Decision (EU) 2018/796", "url": "https://eur-lex.europa.eu/eli/dec/2018/796/oj", "type": "source", "title": "ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union", "publisher": "Official Journal of the European Union (EUR-Lex)" }, { "label": "FCA PS19/18", "url": "https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products-sold-retail-clients", "type": "source", "title": "PS19/18: Restricting contract for difference products sold to retail clients", "publisher": "FCA" }, { "label": "leverage and margin", "url": "https://thetraderwiki.com/en/leverage-and-margin/#retail-caps", "type": "internal" }, { "label": "CySEC", "url": "https://www.cysec.gov.cy/", "type": "source", "title": "Cyprus Securities and Exchange Commission", "publisher": "CySEC" }, { "label": "BaFin", "url": "https://www.bafin.de/", "type": "source", "title": "Bundesanstalt für Finanzdienstleistungsaufsicht", "publisher": "BaFin" }, { "label": "AMF", "url": "https://www.amf-france.org/", "type": "source", "title": "Autorité des marchés financiers", "publisher": "AMF" }, { "label": "CONSOB", "url": "https://www.consob.it/", "type": "source", "title": "Commissione Nazionale per le Società e la Borsa", "publisher": "CONSOB" }, { "label": "CNMV", "url": "https://www.cnmv.es/", "type": "source", "title": "Comisión Nacional del Mercado de Valores", "publisher": "CNMV" }, { "label": "CMVM", "url": "https://www.cmvm.pt/", "type": "source", "title": "Comissão do Mercado de Valores Mobiliários", "publisher": "CMVM" }, { "label": "KNF", "url": "https://www.knf.gov.pl/", "type": "source", "title": "Komisja Nadzoru Finansowego", "publisher": "KNF" }, { "label": "product intervention", "url": "https://thetraderwiki.com/en/glossary/#product-intervention", "type": "internal" }, { "label": "ESMA product intervention", "url": "https://www.esma.europa.eu/policy-activities/mifid-ii-and-investor-protection/product-intervention", "type": "source", "title": "Product Intervention", "publisher": "ESMA" }, { "label": "major and offshore regulators", "url": "https://thetraderwiki.com/en/is-forex-and-cfd-trading-safe/#major-versus-offshore", "type": "internal" }, { "label": "FSMA", "url": "https://www.fsma.be/", "type": "source", "title": "Financial Services and Markets Authority", "publisher": "FSMA" }, { "label": "FSMA regulation", "url": "https://www.fsma.be/en/news/fsma-regulation-establishes-framework-distribution-otc-derivatives-binary-options-cfds", "type": "source", "title": "FSMA Regulation establishes a framework for the distribution of OTC derivatives (binary options, CFDs…)", "publisher": "FSMA" }, { "label": "CFTC", "url": "https://www.cftc.gov/", "type": "source", "title": "Commodity Futures Trading Commission", "publisher": "CFTC" }, { "label": "CFTC release 7809-18", "url": "https://www.cftc.gov/PressRoom/PressReleases/7809-18", "type": "source", "title": "CFTC Charges Trading Platform with Illegal Transactions Margined in Bitcoin… (Release 7809-18)", "publisher": "CFTC" }, { "label": "rules by country", "url": "https://thetraderwiki.com/en/is-forex-and-cfd-trading-safe/#legal-by-country", "type": "internal" }, { "label": "Directive 2014/65/EU", "url": "https://eur-lex.europa.eu/eli/dir/2014/65/oj", "type": "source", "title": "Directive 2014/65/EU on markets in financial instruments (MiFID II)", "publisher": "EUR-Lex" }, { "label": "becoming a professional client", "url": "https://thetraderwiki.com/en/maximum-leverage/#professional", "type": "internal" }, { "label": "choosing a provider", "url": "https://thetraderwiki.com/en/choosing-a-provider/#client-money", "type": "internal" } ] }, { "type": "faq", "id": "getting-started", "heading": "Getting started", "url": "https://thetraderwiki.com/en/faq/#getting-started", "intro": [ "Questions about getting started include checking a licence, whether a demo is useful, which platform to use, how much capital you need and where to complain." ], "items": [ { "id": "how-to-check-a-licence", "question": "How do I check that a provider is licensed?", "url": "https://thetraderwiki.com/en/faq/#how-to-check-a-licence", "answer": [ "Checking a licence means locating the company you actually sign your contract with on your regulator’s register, using its legal name and registration number. Open the register yourself and don’t click a link on the provider’s site. Make sure the name, address and permissions listed match what’s in your client agreement. In the UK, the FCA publishes the Financial Services Register and a firm checker (Financial Services Register, FCA Firm Checker). The how to check a licence section sets out the four steps, and is trading safe explains how clone firms copy a real firm’s details." ] }, { "id": "is-a-demo-useful", "question": "Is a demo account useful?", "url": "https://thetraderwiki.com/en/faq/#is-a-demo-useful", "answer": [ "A demo account is useful for learning the platform, the order types and how margin works. As a test of a strategy, it misleads. The only time a demo tells you something useful is when its balance, trade sizes and costs match your real account. What a demo leaves out is how orders are really filled and the wider spreads around news. A demo may not charge financing. A demo cannot copy how you behave when real money is at stake (demo accounts). The how to start trading page shows where a demo fits among the steps before a first real trade." ] }, { "id": "what-platform", "question": "Which trading platform should I use?", "url": "https://thetraderwiki.com/en/faq/#what-platform", "answer": [ "The provider matters more than the trading platform you use. MetaTrader 4 and 5, cTrader, TradingView integrations and providers’ own platforms vary in order types, charting and automation. The provider sets all the prices, fills and terms, so the same platform works differently across providers. The trading platforms page shows those differences and what to check on any platform." ] }, { "id": "how-much-capital", "question": "How much capital do I need?", "url": "https://thetraderwiki.com/en/faq/#how-much-capital", "answer": [ "How much capital you need depends on your own risk rule, not on the provider’s minimum deposit. Your account has to be big enough for two conditions. The trade size you get from your stop distance and your risk-per-trade share must be above the smallest size the provider allows. The account must also be able to survive a run of losses without reaching the close-out level. TheTraderWiki doesn’t suggest an amount. The risk management page shows the calculation, while How to start trading sets out the steps for a beginner in order." ] }, { "id": "where-to-complain", "question": "Where do I complain about a provider?", "url": "https://thetraderwiki.com/en/faq/#where-to-complain", "answer": [ "A complaint about a provider goes to the provider first, in writing and through the complaints procedure set out in its terms. If that fails, the dispute moves to the ombudsman or dispute-resolution scheme where the provider is authorised. Misconduct, as opposed to a dispute, is reported to the regulator that authorised the provider. TheTraderWiki isn’t a provider and can’t handle complaints. The contact page lists where complaints belong." ] } ], "links": [ { "label": "Financial Services Register", "url": "https://register.fca.org.uk/", "type": "source", "title": "Financial Services Register", "publisher": "FCA" }, { "label": "FCA Firm Checker", "url": "https://www.fca.org.uk/consumers/fca-firm-checker", "type": "source", "title": "FCA Firm Checker", "publisher": "FCA" }, { "label": "how to check a licence", "url": "https://thetraderwiki.com/en/is-forex-and-cfd-trading-safe/#check-a-regulated-broker", "type": "internal" }, { "label": "is trading safe", "url": "https://thetraderwiki.com/en/is-forex-and-cfd-trading-safe/#clone-firms", "type": "internal" }, { "label": "demo accounts", "url": "https://thetraderwiki.com/en/demo-accounts/", "type": "internal" }, { "label": "how to start trading", "url": "https://thetraderwiki.com/en/how-to-start-trading/#seven-steps", "type": "internal" }, { "label": "MetaTrader 4 and 5", "url": "https://thetraderwiki.com/en/metatrader-4-and-5/", "type": "internal" }, { "label": "trading platforms", "url": "https://thetraderwiki.com/en/trading-platforms/", "type": "internal" }, { "label": "minimum deposit", "url": "https://thetraderwiki.com/en/trading-account-types/#deposits-and-currency", "type": "internal" }, { "label": "risk management", "url": "https://thetraderwiki.com/en/risk-management/#position-sizing", "type": "internal" }, { "label": "How to start trading", "url": "https://thetraderwiki.com/en/how-to-start-trading/", "type": "internal" }, { "label": "contact", "url": "https://thetraderwiki.com/en/contact/#where-to-complain", "type": "internal" } ] }, { "type": "sources", "id": "sources", "heading": "Sources", "url": "https://thetraderwiki.com/en/faq/#sources", "intro": [ "The original documents this page cites, in the order they first appear." ], "items": [ { "key": "esma", "title": "European Securities and Markets Authority", "publisher": "ESMA", "url": "https://www.esma.europa.eu/" }, { "key": "esma-2018-decision", "title": "ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union", "publisher": "Official Journal of the European Union (EUR-Lex)", "date": "2018-05-22", "url": "https://eur-lex.europa.eu/eli/dec/2018/796/oj" }, { "key": "fca", "title": "Financial Conduct Authority", "publisher": "FCA", "url": "https://www.fca.org.uk/" }, { "key": "fca-ps19-18", "title": "PS19/18: Restricting contract for difference products sold to retail clients", "publisher": "FCA", "date": "2019-07-01", "url": "https://www.fca.org.uk/publications/policy-statements/ps19-18-restricting-contract-difference-products-sold-retail-clients" }, { "key": "esma-2018-press", "title": "ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors", "publisher": "ESMA", "date": "2018-03-27", "url": 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