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CFD Trading Using Stop Losses
With CFDs, it can be just as easy to lose money as to make it. One way of reducing the risk of losing too much money is to opt for a stop loss limit. This is where the trader agrees a limit beforehand which is the maximum amount of money he is prepared to lose. If the markets go against him and he starts to lose money, the stop loss will automatically stop the bet when the agreed loss limit is reached.
Where this falters is when the markets move too quickly for the stop to be put in place. In this case it is also possible for the CFD trader to ask for a guaranteed stop loss to protect his money.
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