Risks of CFD trading

Ad Blocker Detected

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by disabling your ad blocker.

Tricking yourself into believing your are investing

CFD trading is more akin to daytrading shares than actually long-term investing in a company. This is important to keep in mind, since they are two very different styles of making money and come with their own characteristics. Both can make you plenty of money, but you should go in with open eyes and call a spade a spade.

You don´t actually own anything

When you plonk money down for a CFD, you are essentially betting on a certain outcome. You do not become the owner of a share, of a commodity, etc. You can not elect to ”weather this one out” and hold on to your asset through turbulent times.

You are also very much in the claws of the company/people running the CFD trading platform. If they are honest, reputable and capable of honor their committments, that´s great. If not, you are in for a world of trouble because you are actually not the owner of anything. You can´t go to their bankcruptcy hearing and demand to get your 100 Apple shares back from the wreckage, because you never owned any shares in the frist place – you were only betting on market changes.


Where there is money, there will be scams. No area is free from fraudsters, so we strongly advice you to learn about common, and not so common, scams and similar dishonest practises. This is not a 100% vaccination against scams, but it will increase your ability to spot at least some of them.

Also be aware that many dishonest people skillful move in the grey areas where they are technically not breaking the law.

Beware of leveraged trading

Leveraged trading is super popular within the world of CDF trading, it is easy to understand why. You make a small deposit, and suddenly have access to a large capital to risk. With a larger capital, it is possible to make substational amounts of profit. Of course, it also becomes possible to incur substantial amounts of loss. Using leverage is risking borrowed money, which means you can lose much more than you ever had in your account, and you can end up in debt.

Screen addiction

CFD trading is really fun and exciting, and it is also possible to make substantial amounts of money from it. All this excitment and positive reenforcement can of course make trading a bit addictive, so it is a good idea to have a plan in place for how much time you want to spend in front of the screen. Not having a well-balanced life is bad for various reasons, and can also make you a less competent trader. Don´t let your health, relationships, hobbies, etcetera suffer because of the urge to constantly be ”on”, looking for the next opportunity to make money from CFD:s. This risk is by no means unique to CFD trading; pretty much anything in life that is exciting have a tendency to draw us away from activites that doesn´t offer the same instant quick-relase of dopamine in the brain.