What percentage to invest in CFDs

[holmejohn142]

Hi guys, I currently have around £20,000 to invest with. I started investing in CFDs a few months ago and managed to get around £1200 from an initial £200 investment. I am wondering what percentage of the 20 grand I should use to invest in CFDs. Would 5 grand be too much? I'm thinking of around 10 grand in bonds and blue chip stocks (medium to long term), 5 grand in more volatile stocks/Forex and the rest in CFDs. I live in a country where investments aren't taxed at all (yay!) either as part of my salary or through CGT so ISAs and the like don't actually exist here. Thanks.

 

[alexaherself]

CFD's are in principle, in the sense you're asking about, no different from other forms of trading.

What matters is your position-sizing: not what proportion of your total capital to invest in CFD's (that's not something anyone here can work out for you, without knowing all about your personal financial circumstances, degree of risk-aversion, and so on), but what proportion of your capital to expose to risk on any individual trade (in principle, I'd recommend not more than 1%, but that also depends on various other factors you haven't mentioned).