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Let’s put it this way: Trading with CFDs can be safe. However, for a lot of people, the appeal is precisely the risks associated with it. Maybe skiing would be a good analogy. Is skiing safe? Well, are you in a well-maintained easy route, or are you an adrenaline junky careening down the side of a hill? So it goes with CFDs.

There are a couple of aspects of safety that are important to keep in mind. In fact, keeping safety consideration as an important part of trading is often seen as the basis of success in trading CFDs like Forex. It has to do with some principles of basic investment strategy.

Risk and Reward

In general, there is a strong correlation between the level of risk and the return on investment. More profitable investments generally imply a higher level of risk (but, importantly, not necessarily vice versa). This is because, in order for someone to engage in a more risky investment, there has to be a higher return on the investment to make the risk worthwhile.

If you ...

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