Money

Should I trade CFDs, forex or copy trading?

Eight honest questions. Most retail accounts lose money on these products.

Should I trade CFDs, forex or copy trading? The quiz

Money choices carry fear, guilt and hope too. Let's slow down and look at the facts. Your answers stay on your device; nobody else sees them.

1Is this money you could lose completely, today, without it changing your life?
2Can you explain leverage, margin calls and overnight fees in your own words?
3Do you already have savings and long-term investments in place?
4Are you hoping to replace your salary or make money fast?
5Did you find it through an ad, an influencer or a "mentor"?
6Would you be tempted to win back losses by trading bigger?
7Have you practised on a demo account for months, and kept a record?
8Is the broker regulated in your country, with negative balance protection?
8 questions

"Risk comes from not knowing what you're doing."

Warren Buffett

If it doesn't make sense to you, it isn't for you. Never rush a money decision because of fear of missing out: rushing is the weakness of fools.

What is a CFD?

A contract for difference (CFD) is a bet with a broker on whether a price will go up or down. You never own the asset. With leverage, a small move against you can wipe out your deposit. EU and UK brokers must publish how many retail accounts lose money on CFDs, and the figures are usually somewhere between 60% and 85%.

Forex and copy trading

Retail forex trading is usually done with leveraged CFDs too, so the same risks apply. Copy trading lets you mirror another trader, but past results are often lucky streaks, the leader does not lose your money, you do, and many copied strategies use high leverage. See our risky investment checklist.

Questions people ask

Is forex trading a scam?

Forex itself is a real market, but many retail forex offers are scams or near-scams: unregulated brokers, "signal" groups and mentors selling courses. Even with honest brokers, most retail traders lose money because of leverage and costs.

Is copy trading safe?

No product with leverage is safe. Copy trading adds the risk of following someone whose past results were luck. Treat it like gambling money, if at all.

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TheHardChoices gives general life guidance, not professional advice. It is not a substitute for medical, mental health, legal or financial help. If you are in crisis or feel unsafe, contact local emergency services or a crisis line now. Full disclaimer