DiscountFX.Com Review Is Discount FX A Legit or Scam Broker

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DiscountFX.Com Review: Is Discount FX A Legit or Scam Broker?

DiscountFX Review: Discount Fx is a brand of CySEC regulated company, GBE Brokers Ltd. The presentation of the website is very creative and tries to put clients’ minds at rest. Offered are both demo and live accounts. A video is provided on the page for more information about the broker. It is stated that it is for traders who can trade on their own.

It is promised that the prices at DiscountFX are fixed with no hidden charges. There are several trading instruments available like: currency pairs, oil, natural gas, stocks, indices, precious metals, and many more. The broker has offices in Cyprus and Germany.

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DiscountFX Trading Platform

The DiscountFX trading software uses a MetaTrader4 trading platform. MT4 has proven to be one of the best trading platform and comes with a wide range of advantages. It offers a standard leverage of 1:30 that can improve to 1:200 for proven expert traders.

DiscountFX had stated that its only account type starts from zero pips and then a trading commission of $2 per standard traded lot. This means that only 0.2 pips will be added to the actual spread for every $2 standard lot.

The demo account however showed that the spread moved above 1 pip for EURUSD pair and it differs from the claims found on DiscountFX page.

Deposit and Withdrawal Methods

It is stated that DiscountFX accepts deposits that are made through MasterCard, Visa, American Express, bank wire transfer and probably other e-Wallets popular used.

A minimum deposit of $500 is demanded and since it states no hidden charges, it is likely that withdrawals do not incur charges.

This information is important so that clients can invest any little amount they can spare. In order to be able to first watch the working of the brokerage. If then they are satisfied with what they see, they can determine when to withdraw their money.

Is DiscountFX A Licensed Broker?

Discount FX is a brand of CySEC regulated company, GBE Brokers Ltd. The parent company holds a license from the Cyprus Securities and Exchange Commission. This is one of Europe’s top authorities and this license is a plus.

The license places a mandate on brokers to compensate their clients up to 20,000 EUR if they go bankrupt.

Support

To contact DiscountFX call: +357 2528 1727 (Cyprus) or +40 605 901 045 (Germany).

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Conclusion

DiscountFx holds a license from CySEC and this proves it is a legit broker. The difference in its promised spread from what is seen in the demo account is a problem that should be fixed. Deposit minimum is higher than the standard $250. Generally, it seems to be a straightforward and transparent brokerage.

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Fortrade

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Forex.com Review

Robust trading platforms for the new and professional trader

Investopedia is committed to rigorous editorial standards to provide our readers with the best advice and recommendations. We may receive compensation when you click on links to products we reviewed. Learn more about our methodology and review process.

  • Account Minimum: $50
  • Fees: Average EUR/USD spread is 1.3
  • Best For: The very active forex trader

Disclaimer

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Forex.com was founded in 2001 and is regulated in multiple countries. It offers robust trading platforms for the new trader as well as the professional. Its parent company is GAIN Capital Holdings, which trades on the NYSE under ticker GCAP.

Pricing is transparent, although several types of accounts are offered. For instance, in one account type traders pay the spread on every trade. Other types of accounts charge a commission but the spread is smaller. Forex.com provides the average spreads for all of these types of accounts.

Forex.com currently ranks in the following category:

Forex.com disclosure: Forex trading involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk.

Great mobile and desktop functionality

TradingView charts built into platform

Higher spreads than international brokers

Only a small rebate for active traders

No negative balance protection

No crypto currency trading in U.S., but it is allowed in other countries

Trust

Forex.com is regulated in the U.K., U.S., Canada, Australia, Japan, Singapore, and the Cayman Islands. Since laws vary by country, the products offered in each country also vary. For example, CFDs are not available to U.S. clients but are available outside the U.S.

Client funds are kept segregated from the funds of Forex.com, which helps safeguard client’s money in the event the company has financial problems. No additional insurance is provided by the company in terms of safeguarding funds. The exception is in Canada, where Canadian clients’ funds are protected by the Canadian Investor Protection Fund.

Client accounts can go negative, as negative balance protection is not offered by Forex.com. Accounts are automatically monitored, however, and if a client fails to have sufficient margin in their account, positions will automatically be liquidated. Due to the fast-moving nature of markets, this won’t always prevent negative balances. In plain English, traders with negative account balances are on the hook for more money than they initially deposited into their accounts.

Guaranteed stop losses are offered, but at a cost. Typical stop losses help control risk but are subject to slippage which could cause a negative balance during extreme market moves.

Pricing is transparent and easily found on Forex.com. Also, functional demo accounts are provided for free which give potential clients time to assess the pricing structure before committing real capital.

While Forex.com encrypts their data, little is offered in the way of additional security, such as fingerprint technology or two-factor authentication.

Desktop Experience

Forex.com’s trading platforms accommodate the active day trading professional as well as the occasional longer-term trader. Choose between the advanced trading platform or MetaTrader 4 (MT4) for a desktop experience, the web trader for a browser-based trading experience, or choose the Forex.com or MT4 mobile app for trading on portable smart devices.

Whether you use web trader or the downloadable advanced trading platform, making trades is easy. (Of course, that doesn’t mean making money is easy.) You can trade directly from charts by right-clicking or hit the buy and sell buttons along the top of the chart. This brings up an order window where the entry, stop loss, and profit target is set. Enable one-click trading for rapid trade execution.

Within the platforms, traders can access charts, economic calendars, news, see positions, and trade/order history, access trade signals and research reports, as well as market analysis from Forex.com analysts.

There aren’t many drawbacks to the platforms. There are loads of indicator and drawing tools, and it is functional enough to make rapid-fire trades if needed.

A Forex.com account can also be integrated with NinjaTrader, a popular third-party trading platform.

Mobile Experience

The mobile app is functional, providing traders with access to all their account information. Traders can add or withdraw funds, view trade history, create watchlists, access news, and view charts from the mobile app. It is also easy to navigate and set up.

The charting feature is one of the drawbacks of the mobile app. There are a limited number of common indicators available, such as RSI, MACD, and moving averages, but drawing functions and more advanced technical tools are missing.

Full order functionality is available, including conditional orders and the ability to easily place stop losses and profit targets at the time of a trade.

Investment Products

U.S. clients have access to 83 forex pairs, as well as unleveraged gold and silver. Clients outside the U.S. have access to all the forex pairs, as well as CFDs on stocks, commodities, indexes. Cryptocurrency trading is available in the U.K.

Opening an account requires only 50 units of the account currency. For example, in the U.S., an account can be opened with as little as $50.

The minimum trade size on a currency is $1,000. Therefore, if opening an account with $50, at least 20:1 leverage is required to take the smallest position possible. Leverage increases risk.

Commissions and Fees

Forex.com is primarily a market-making broker. This means they do not connect client orders with the raw prices being offered in the market. Instead, Forex.com marks the price up slightly, creating a larger spread, which is how they generate revenue. The markups can be seen when comparing a standard account and a Direct Market Access (DMA) account. The DMA account offers no markup on spreads, but a commission is charged. The standard account offers no commissions, but it features larger spreads. The commission account is in the middle. It has reduced spreads (still some markup) and slightly lower commissions than the DMA account.

Forex.com lags behind international brokers in term of pricing, with many international brokers offering tighter spreads and lower commissions to traders even with small accounts.

Standard account and commission account traders may also benefit from the Active Trader Program. The program is open to anyone who opens an account with at least $25,000 or who trades $25 million in a month. The program is not open to DMA account holders, as that account already has volume-based fee reductions.

In terms of other fees, any account with less than $10,000 USD and no trading activity for more than 12 months is subject to a $15-per-month inactivity fee. Accounts over $10,000 are exempt from inactivity fees.

There are no additional fees charged by Forex.com for deposits. For withdrawals, checks and ACH payments are free. U.S. wire transfers under $10,000 incur a $25 fee, and all other wire transfers are $40. Wire transfers over $10,000 are free.

Customer Support

Clients have multiple ways to contact Forex.com, including online chat and live phone support, as well as extensive FAQ and tutorials on their website. Support is available from 10 a.m. ET Sunday to 5 p.m. ET Friday.

Online chat and phone support are available to both current and prospective clients. Social media support is not available, although they do have social media accounts where they post market analysis and company information.

Chat support is a chatbot. This limits the questions that can be asked and eliminates the possibility of finding answers to anything beyond the most simple questions.

For more in-depth questions, send a message via email. The message function is provided at the bottom of the Support page on Forex.com. Specific questions will be answered but expect to wait one to three business days for a response.

Phone support is the quickest way to have questions answered by a real person. There is a small menu to choose from at the start of the call. Wait times will vary based on call volume, but during a normal day you can expect to wait several minutes before being connected with a representative.

What You Need to Know

Forex.com is a good fit for the very active trader because active trading results in lower trading costs. Forex.com is also a good fit for the infrequent trader because the slightly higher fees and spreads Forex.com charges are inconsequential if only taking a few trades per month.

For traders in the middle, however, who make a few trades per day, Forex.com has slightly higher spreads and fees than many brokers outside the U.S., which could unnecessarily increase trading costs.

Methodology

Investopedia is dedicated to providing investors with unbiased, comprehensive reviews and ratings of online brokers. Our reviews are the result of six months of evaluating all aspects of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, costs and fees, security, the mobile experience and customer service. We established a rating scale based on our criteria, collecting over 3,000 data points that we weighed into our star scoring system.

In addition, every broker we surveyed was required to fill out a 320-point survey about all aspects of their platform that we used in our testing. Many of the online brokers we evaluated provided us with in-person demonstrations of their platforms at our offices.

Our team of industry experts, led by Theresa W. Carey, conducted our reviews and developed this best-in-industry methodology for ranking online investing platforms for users at all levels. Click here to read our full methodology.

Is Your Forex Broker a Scam?

If you do an internet search on forex broker scams, the number of results is staggering. While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.

When you’re looking to trade forex, it’s important to identify brokers who are reliable and viable, and to avoid the ones that are not. In order to sort out the strong brokers from the weak and the reputable ones from those with shady dealings, we must go through a series of steps before depositing a large amount of capital with a broker.

Trading is hard enough in itself, but when a broker implements practices that work against the trader, making a profit can be nearly impossible.

Key Takeaways

  • If your broker does not respond to you, it may be a red flag that he or she is not looking out for your best interests.
  • To make sure you’re not being duped by a shady broker, do your research, make sure there are no complaints, and read through all the fine print on documents.
  • Try opening a mini account with a small balance first, and make trades for a month before attempting a withdrawal.
  • If you see buy and sell trades for securities that don’t fit your objectives, your broker may be churning.
  • If you are stuck with a bad broker, review all your documents and discuss your course of action before taking more drastic measures.

Separating Forex Fact From Fiction

When researching a potential forex broker, traders must learn to separate fact from fiction. For instance, faced with all sorts of forums posts, articles, and disgruntled comments about a broker, we could assume that all traders fail and never make a profit. The traders that fail to make profits then post content online that blames the broker (or some other outside influence) for their own failed strategies.

One common complaint from traders is that a broker was intentionally trying to cause a loss in the form of statements such as, “As soon as I placed the trade, the direction of the market reversed” or “The broker stop hunted my positions,” and “I always had slippage on my orders, and never in my favor.” These types of experiences are common among traders and it is quite possible that the broker is not at fault.

Rookie Traders

It is also entirely possible that new forex traders fail to trade with a tested strategy or trading plan. Instead, they make trades based on psychology (e.g., if a trader feels the market has to move in one direction or the other) and there is essentially a 50% chance they will be correct.

When the rookie trader enters a position, they are often entering when their emotions are waning. Experienced traders are aware of these junior tendencies and step in, taking the trade the other way. This befuddles new traders and leaves them feeling that the market—or their brokers—are out to get them and take their individual profits. Most of the time, this is not the case. It is simply a failure by the trader to understand market dynamics.

Broker Failures

On occasion, losses are the broker’s fault. This can occur when a broker attempts to rack up trading commissions at the client’s expense. There have been reports of brokers arbitrarily moving quoted rates to trigger stop orders when other brokers’ rates have not moved to that price.

Luckily for traders, this type of situation is an outlier and not likely to occur. One must remember that trading is usually not a zero-sum game, and brokers primarily make commissions with increased trading volumes. Overall, it is in the best interest of brokers to have long-term clients who trade regularly and thus, sustain capital or make a profit.

Behavioral Trading

The slippage issue can often be attributed to behavioral economics. It is common practice for inexperienced traders to panic. They fear missing a move, so they hit their buy key, or they fear losing more and they hit the sell key.

In volatile exchange rate environments, the broker cannot ensure an order will be executed at the desired price. This results in sharp movements and slippage. The same is true for stop or limit orders. Some brokers guarantee stop and limit order fills, while others do not.

Even in more transparent markets, slippage happens, markets move, and we don’t always get the price we want.

Communication Is Key

Real problems can begin to develop when communication between a trader and a broker begins to break down. If a trader does not receive responses from their broker or the broker provides vague answers to a trader’s questions, these are common red flags that a broker may not be looking out for the client’s best interest.

Issues of this nature should be resolved and explained to the trader, and the broker should also be helpful and display good customer relations. One of the most detrimental issues that may arise between a broker and a trader is the trader’s inability to withdraw money from an account.

Broker Research Protects You

Protecting yourself from unscrupulous brokers in the first place is ideal. The following steps should help:

  • Do an online search for reviews of the broker. A generic internet search can provide insights into whether negative comments could just be a disgruntled trader or something more serious. A good supplement to this type of search is BrokerCheck from the Financial Industry Regulatory Authority (FINRA), which indicates whether there are outstanding legal actions against the broker. And if appropriate, gain a clearer understanding of the U.S. regulations for forex brokers.
  • Make sure there are no complaints about not being able to withdraw funds. If there are, contact the user if possible and ask them about their experience.
  • Read through all the fine print of the documents when opening an account. Incentives to open an account can often be used against the trader when attempting to withdraw funds. For instance, if a trader deposits $10,000 and gets a $2,000 bonus, and then the trader loses money and attempts to withdraw some remaining funds, the broker may say they cannot withdraw the bonus funds. Reading the fine print will help make sure you understand all contingencies in these types of instances.
  • If you are satisfied with your research on a particular broker, open a mini account or an account with a small amount of capital. Trade it for a month or more, and then attempt to make a withdrawal. If everything has gone well, it should be relatively safe to deposit more funds. If you have problems, attempt to discuss them with the broker. If that fails, move on and post a detailed account of your experience online so others can learn from your experience.

It should be pointed out that a broker’s size cannot be used to determine the level of risk involved. While larger brokers grow by providing a certain standard of service, the 2008-2009 financial crisis taught us that a big or popular firm isn’t always safe.

The Temptation to Churn

Brokers or planners who are paid commissions for buying and selling securities can sometimes succumb to the temptation to effect transactions simply for the purpose of generating a commission. Those who do this excessively can be found guilty of churning—a term coined by the Securities and Exchange Commission (SEC) that denotes when a broker places trades for a purpose other than to benefit the client. Those who are found guilty of this can face fines, reprimands, suspension, dismissal, disbarment, or even criminal sanctions in some cases.

SEC Defines Churning

The SEC defines churning in the following manner:

Churning occurs when a broker engages in excessive buying and selling of securities in a customer’s account chiefly to generate commissions that benefit the broker. For churning to occur, the broker must exercise control over the investment decisions in the customer’s account, such as through a formal written discretionary agreement. Frequent in-and-out purchases and sales of securities that don’t appear necessary to fulfill the customer’s investment goals may be evidence of churning. Churning is illegal and unethical. It can violate SEC Rule 15c1-7 and other securities laws.

The key to remember here is that the trades that are placed are not increasing your account value. If you have given your broker trading authority over your account, then the possibility of churning can only exist if they are trading your account heavily, and your balance either remains the same or decreases in value over time.

Of course, it is possible that your broker may be genuinely attempting to grow your assets, but you need to find out exactly what they are doing and why. If you are calling the shots and the broker is following your instructions, then that cannot be classified as churning.

Evaluate Your Trades

One of the clearest signs of churning can be when you see buy and sell trades for securities that don’t fit your investment objectives. For example, if your objective is to generate a current stable income, then you should not be seeing buy and sell trades on your statements for small-cap equity or technology stocks or funds.

Churning with derivatives such as put and call options can be even harder to spot, as these instruments can be used to accomplish a variety of objectives. But buying and selling puts and calls should, in most cases, only be happening if you have a high-risk tolerance. Selling calls and puts can generate current income as long as it is done prudently.

How Regulators Evaluate Churning

An arbitration panel will consider several factors when they conduct hearings to determine whether a broker has been churning an account. They will examine the trades that were placed in light of the client’s level of education, experience, and sophistication as well as the nature of the client’s relationship with the broker. They will also weigh the number of solicited versus unsolicited trades and the dollar amount of commissions that have been generated as compared to the client’s gains or losses as a result of these trades.

There are times when it may seem like your broker may be churning your account, but this may not necessarily be the case. If you have questions about this and feel uneasy about what your advisor is doing with your money, then don’t hesitate to consult a securities attorney or file a complaint on the SEC’s website.

Already Stuck With a Bad Broker?

Unfortunately, options are very limited at this stage. However, there are a few things you can do. First, read through all documents to make sure your broker is actually in the wrong. If you have missed something or failed to read the documents you signed, you may have to assume the blame.

Next, discuss the course of action you will take if the broker does not adequately answer your questions or provide a withdrawal. Steps may include posting comments online or reporting the broker to FINRA or the appropriate regulatory body in your country.

The Bottom Line

While traders may blame brokers for their losses, there are times when brokers really are at fault. A trader needs to be thorough and conduct research on a broker before opening an account and if the research turns up positive for the broker, then a small deposit should be made, followed by a few trades and then a withdrawal. If this goes well, then a larger deposit can be made.

However, if you are already in a problematic situation, you should verify that the broker is conducting illegal activity (such as churning), attempt to have your questions answered, and if all else fails, and/or report the person to the SEC, FINRA, or another regulatory body that could enforce action against them.

TopedgeFX.com

Honest Trading Product | Reviews

Forex Reviews Ι Stocks and CFDs Brokers

When you want to trade Forex, Stocks, Futures, Cryptocurrencies, Bonds or CFDs, there’s always a broker or an exchange where you can open an account to facilitate your trading.

In fact, since trading became popular on the internet, hundreds of brokers have sprang up and they all masquerade as “the best brokers” to trade with on the internet.

Some of the features they use to lure traders include:

  1. Education capabilities
  2. Market research and analysis including weekly trade ideas
  3. AI software for trading
  4. High leverage and tight spreads
  5. Deposit bonuses
  6. Cutting-edge trading platform

Because there are literally hundreds of brokers on the internet offering the same exact thing, one may ask:

How do we choose the best broker and avoid the bad ones?

To answer that question, we’ve selected 3 brokers that we think have at least met industry standards.

These brokers are ranked according to features, level of customer support, regulations, reputation and many other factors.

On the other hand, we leave traders to decide which brokers they want to choose. Usually, one trader’s style is different from another trader’s strategy.

The two traders cannot be satisfied by one broker due to their varying trading styles and needs in general.

The list of the best brokers to trade with

As we’ve said previously, we’ll rank brokers based on their capabilities and most of these parameters are looked at in favor of the client.

So we’ll also look at how they handle customer funds, structure of their business, whether or not they’re regulated and also length of time that they’ve stayed in operation.

On top of that, we usually update this list to reflect any changes or actions that may have been taken against any broker by their respective regulatory authorities.

We’re only listing brokers that are regulated by financial organizations listed below:

Some of the financial regulators above are made up for independently governed agencies while others are operated by the Central bank of the country where the financial regulator is based at.

Our Ratings: 80/100

Withdrawal time: Under 24 hrs

MT4 and MT5: Yes

Minimum Deposit: $100

Support: Very Good

Our Ratings: 75/100

Regulated: FCA 19776 IBC 2020

Withdrawal time: Under 2 hrs

MT4 and MT5: Yes

Minimum Deposit: $50

Support: Very Good

Our Ratings: 75/100

Assets: Forex, Stocks, Options, Crypto

Withdrawal time: Under 2 hrs

Minimum Deposit: $10

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How to Avoid Forex Trading Scams

The foreign exchange (forex) market is huge, with an average daily trading volume of more than $5 trillion, including currency futures and options. It’s also not very well regulated. That means the opportunity still exists for many forex scams that promise quick fortunes through “secret trading formulas,” algorithm-based “proprietary” trading methodologies, or “forex robots” that do the trading for you.

Before getting involved in forex trading, perform your own due diligence by visiting the Background Affiliation Status Information Center (BASIC) website created by the National Futures Association (NFA), the futures and options industry’s self-regulatory organization, to learn how to choose a reputable broker and avoid scams. Before dealing with the public, every company or person who wants to conduct off-exchange forex business is required to become a member of the NFA and to register with the Commodity Futures Trading Commission, the government agency that oversees futures and options trading. You can search BASIC to find out what regulatory actions, if any, have been taken against a particular individual or firm.

Signal Sellers

One of the challenges a rookie forex investor faces is determining which operators to trust in the forex market and which to avoid. Signal sellers are one group of operators to consider carefully.

A signal seller basically offers a system that purports to identify favorable times for buying or selling a currency pair. The system may be manual, in which case the user must enter trading info, or it may be automated to put through a trade when a signal occurs.

Some systems rely on technical analysis, others rely on breaking news, and many employ some combination of the two. But they all purport to provide information that leads to favorable trading opportunities. Signal sellers usually charge a daily, weekly, or monthly fee for their services.

A frequent criticism of signal sellers is that if it were really possible to use their system to beat the market, why would the individual or firm that has this information make it widely available? Wouldn’t it make more sense to use this incredible signaling system to make huge profits for themselves?

Other analysts distinguish between known scammers and more reputable sources of market information that offer a well-thought-out signaling service.

Behind these opposing views lies a larger difference of opinion about whether anyone can predict the next move in a trading market. This fundamental disagreement won’t be settled any time soon.

Nobel Prize-winning economist Eugene Fama proposes in his well-regarded efficient market hypothesis that finding these kinds of momentary market advantages really isn’t possible.

His economist colleague Robert Shiller, who’s also a Nobel Prize winner, believes differently, citing evidence that investor sentiment creates booms and busts that can provide trading opportunities.

The best way to determine if a signal seller can benefit you is to open a trading account with one of the better-known forex brokers and enter practice trades that don’t involve real money based on the signals. Be patient, and with time, you’ll determine whether predictive signaling works for you or doesn’t.

Phony Forex Investment Management Funds

In the past few years, forex management funds have proliferated. Most of these are scams. They offer investors the “opportunity” to have their forex trades carried out by highly-skilled forex traders who can offer outstanding market returns in exchange for a share of the profits.

The problem is, this “management” offer requires the investors to give up control over their money and to hand it over to someone they know little about other than the hyped-up and often completely false record of success available on the scammers’ website and brochures.

Investors often end up with nothing, while the scammers use investors’ funds to live high on the hog.

A good rule of thumb in the forex market, as with other areas of investment, is that if it sounds too good to be true, such as annual returns of more than 100 percent, for example, it’s almost certainly a scam.

Dishonest Brokers

Although the forex market is not entirely unregulated, it has no single, central regulating authority. The forex spot market, however, which accounts for the majority of trades, is completely unregulated. Unsurprisingly, some forex brokers do not deal fairly with their customers and, in some instances, defraud them.

Aside from searching the BASIC website, you can help yourself avoid a bad broker by dealing with one that also handles stock market trades and so is regulated by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA). While the forex trade itself may be unregulated, a broker subject to SEC and FINRA oversight probably wouldn’t risk its license for other securities by defrauding its forex customers.

The Balance does not provide tax, investment, or financial services and advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. Investing involves risk including the possible loss of principal.

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