With ongoing uncertainty in the commodities markets and a turbulent global economy climate of recovery, markets have been increasingly volatile, providing CFD traders and other margined investors with the opportunities of generating significant returns, but also posing the substantial risks of leverage as markets turn against a position.

As highly leveraged, potentially risky investments, CFD traders should always be aware of their exposure if the markets take a turn for the worse, and should exercise a cautious approach to protecting their trading capital.

By protecting their trading capital, traders can look to generate more cautious returns on their investment, cutting down the risk profile of CFD trading and maximizing the effectiveness of leverage through sensible, calculated and paced investing, for less volatile, steadier returns.

CFD traders often run into difficulties with leverage.  As a margined trading product, often with low margin requirements fuelling massive leverage, CFDs that work for you can be extremely profitable, while those that work against can cause substantial damage to your capital. At independent Investor, we’re urging a different approach – maintaining a cautious approach to protecting your capital by trading within your limits, and apply leverage only to add weight to successful positions.

By trading cautiously and reasoning your trading decisions, it can be possible to trade CFDs profitably. While the road to successful CFD trading can be bumpy, it needn’t be too costly provided you trade with a sensible approach to leverage, and a cautious approach to risk management.