Understanding Position Sizing in CFDs

Look, people always talk about risk-reward, but it's position sizing that keeps you in the game. You're trading CFDs, which means leverage. Too many people pick a random size, then get wiped out on a normal pullback.

Here’s a better way: decide how much you're willing to lose per trade in terms of capital (say, 1-2%). Then, figure out your stop-loss distance for the specific setup – is it 50 pips, 100 pips? Once you have that, you can calculate exactly how many contracts you can take. For example, if you're risking 1% of a $10k account ($100) and your stop is 10 points away, you can only take 10 units. This is non-negotiable for longevity. It's not about being right often; it's about not being catastrophically wrong when you are.