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Comment by closeparen | Hacker News Reader

Dumb question: since leverage allows you to lose more than you have, what are the repayment terms like when you get yourself into debt? Are the interest rates, repayment term, monthly payments, etc. clearly disclosed like they are for a mortgage or car? How many amateur forex traders had it end in wage garnishment?

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That's not quite how it works (at least, with most of the online forex trading houses like FXCM). At any given time, they know exactly how much you are up or down in total (ie, including your leverage). If you hit the point where you're going to lose more than what you have in your account, they will perform a margin call and close out all your positions.

The really sucky bit here is (I've had that happen) when the market then immediately turns - you simply couldn't buffer the immediate losses ;-)

Do be careful with Forex.

Lots of shady stuff about and what many people don't realize in many (most?) cases of consumer internet platforms (like FXCM), one is actually trading against the company (they are the market maker) not against other participants. Not saying what does or doesn't happen, but the situation is such that there is incentive to do things like widen spreads and hit stop losses.

What this guy said. I've known a handful of people who have made some money on forex, by being extremely diligent and patient. I know many, many more people (including myself) who have lost unhealthy amounts of money while trading forex.

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