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Especially beginners or newcomers should, however, the disadvantages that are also in foreign exchange trading and which can occur there, absolutely include in their considerations. The individual points will now be explained in more detail below.

Obligation to make additional contributions

One of the biggest and most serious disadvantages in the foreign exchange market (here it depends on the broker) is the so-called obligation to make additional contributions. Here it depends on the broker type. These can be divided into 2 groups. In one group there is no obligation to make a margin call, because open positions are automatically closed when the margin is reached. In the other group of CFD brokers it is regulated in such a way that there is a margin call. This makes it possible for the customer not only to lose the invested capital, but in the worst case to assume that he will have to add more money and this can then lead to financial ruin, because the obligation to make additional margin payments cannot be limited.

Especially in the case of a very unfavorable price development or a very fast price decline, it is possible that for example 500 Euros are used, but then due to the unlimited obligation to make additional contributions a few thousand Euros have to be paid into the trading account to compensate for the losses there. Although this example is extreme, it makes it clear that the existing obligation to make additional contributions represents a high risk in financial terms.

However, the risk arising here can be hedged by the possibility of setting a stop-loss order with a guaranteed stop. This ensures that although there is a theoretical obligation to make a margin call, this is not now applied or carried out in practice because the position is closed immediately when a certain price position is reached. Nevertheless, it is worth considering switching directly to a broker without a margin call, where this problem does not exist or such issues do not arise here.