There’s no doubt CFD is a risky business. A contract for difference, or CFD, is a legally-binding contract between two parties, buyer and seller, where the seller agrees to pay the buyer the difference between the current value of an asset and its value at contract time.
Here are the main reasons CFDs don’t suit everyone or are risks to the traders.
Overtrading
One of the silent killers to any account is overtrading. Many people who overtrade are able to stay at breakeven for a length of time and some can even be slightly profitable, but unfortunately many end up in a losing rut, finally unable to climb out.
Trading too large after successive wins (more…)