Turbos, the risks
Turbos have an underlying value: for example currencies, shares, indices or commodities. As an investor you can speculate on a rise (turbo long) or fall (turbo short) of the underlying value. Thanks to the leverage that is present when trading in turbos , you can earn a lot with relatively little of your own investment (but also lose a lot). The leverage ensures that your position is strengthened by a certain amount. Take a leverage of 10, this means that you invest with a position of €500 while you only invest with €50 of your own money. Whether the underlying value increases or decreases, your profit or loss will be 10 times as big. This allows you to achieve results faster, hence the term ‘turbo’.
Know what you are getting into
As quickly as you earn money with turbos, you can lose it just as quickly. Research by the AFM shows that the chance of losing your own investment with some turbos is 80%. So know what you are getting into and only trade in turbos if you know exactly what you are doing.
Tips regarding investing in Turbos
It is wise to only start trading in turbos when you have really mastered it. Therefore, start with a demo account and practice for a while. Here are some more tips on investing in and dealing with the risks of turbos:
- The higher the leverage, the higher the risk. Therefore, especially in the beginning, beware of turbos with a high leverage. For example, use a stop loss to close your position at a price value set by you so that you can prevent further losses.
- The longer a turbo is in the portfolio, the greater the chance of loss.
If you need more tips about investing in turbos, read our article about more tips for investing in turbos .
Compare brokers and start investing in turbos
Are you excited about investing in turbos after reading this article? Compare brokers with turbo possibilities and find the broker that suits you best!