Shares CDF trading risk can be quantified in advance, through applying a calculated approach to assess whether a particular trade is low risk or too risky. Your general risk-per-trade scale should ideally look like this:
Low risk: 1-2% of total equity
Medium risk: 2-5% of total equity
High risk: More than 5% of total equity
Reckless: More than 20% of total equity
As an example: With a £10,000 account, a 3% risk amounts to £300 on a single trade (medium risk).
Disclaimer – Futures, CFD, Margined Foreign Exchange trading, Warrants, Options and Spread Betting all carry a high level of risk to your capital. Only speculate with money you can afford to lose. Futures, CFD, Margined Foreign Exchange trading and Spread Betting may not be suitable for all customers, therefore ensure you fully understand the risks involved and seek independent financial advice if necessary.
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