Why Most CFD Traders Lose Money

Regulators require CFD brokers to publish the percentage of their retail client accounts that lose money, and the figure is usually well over half. The main reasons are not mysterious: leverage magnifies losses as well as gains, trading costs such as spreads, commissions and overnight financing add up, and new traders tend to trade too often and with positions that are too large for their account.

Losses also come from behaviour. Moving or removing a stop-loss to avoid taking a loss, adding to a losing position, or trying to win back money after a bad day are among the most common ways accounts are wiped out. A written trading plan and a fixed maximum risk per trade are the simplest protections.

None of this means trading is impossible, but it does mean you should only ever trade with money you can afford to lose, practise on a demo account first, and treat any promise of steady or guaranteed profits as a warning sign.