I've been exploring different strategies and instruments in trading, and I'm particularly interested in Contracts for Difference (CFDs). One aspect I find intriguing is leverage. With leverage allowing for potentially higher returns by trading on margin, I'm curious about a few things:
- How do you effectively manage risk when trading CFDs, given the high leverage involved?
- For those with experience, what leverage ratios do you typically use, and why?
- What are the most common pitfalls to avoid when using leverage in CFDs, especially for someone relatively new to this?
- Are there particular strategies or tools that you rely on to help mitigate the risks associated with leveraged CFD trades?
Any insights or experiences shared would be appreciated. Looking forward to learning from the community!