Risk management is a critical component of CFD trading. Without proper risk management, traders can quickly lose money on their trades. This article will discuss some of the most crucial risk management techniques for CFD traders. Stop-loss orders One of the most critical risk management techniques is always to stop losses. A stop loss is an order that automatically sells security when it reaches a specific price. It helps limit losses if the security moves against the trader’s position. Limit orders Another critical risk management technique is to use limited orders. Limit orders allow traders to set a maximum price that they are willing to pay or sell a security. It helps protect traders from paying too much for securities or selling them at a loss. Mental stops A technique that CFD traders often overlook is to use mental stops. A mental stop loss occurs when a trader decides
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