According to the CNMV, Spain's securities regulator, between 70% and 90% of investors who trade CFDs lose money, depending on the firm. I am not the one saying it. The regulator said so in a press release dated 12 July 2023, the same day it announced restrictions on advertising these products to retail clients.
If you are thinking about getting into trading, or you have just started, it is worth stopping for a moment before talking about charts or strategies. I used to manage an investment fund, and the first thing to get straight is that investing and trading are two different things.
Two activities that have little in common
Investing means buying assets (shares, bonds, funds) and holding them for years. Your horizon is measured in years, and the return, if it comes, comes from the asset itself: company earnings, interest, the growth of the economy. Time works in your favour, although nothing is guaranteed. And you make few decisions: how much you put in, how you split it, and now and then whether it needs adjusting.
Trading is trying to profit from price moves over short periods, hours or days, often with leveraged products such as CFDs. A CFD is not even the asset. It is a contract with your broker about the asset's price, so you own nothing. There is no asset quietly growing in the background. Your result depends on getting the direction right over a short window, and over short windows it is very hard to tell skill from luck.
The cost you do not see
Every trade has a cost: the spread, the commission if there is one, and the swap if you hold overnight. Any one of them looks small. Here is an illustration, with made-up round numbers. A 10,000 euro trade costs you 3 euros between spread and commission, which is 0.03%. Make ten a day and that is 30 euros a day, around 600 in a month of twenty sessions. On a 5,000 euro account that is 12% a month your method has to earn just to break even. At your broker the figures will be different, since it depends a great deal on the firm and the product, but the mechanics are the same.
With leverage the effect is easier to miss, because these costs are calculated on the full size of the trade, not on the money you deposited. An index fund, by contrast, charges an annual fee and not one per move.
How much time and how much headspace
Short-term trading is not passive income. It takes time in front of the screen, or an automated system that is well supervised, decisions under pressure, and accepting losing streaks without breaking your own rules. It is effort and it is emotional wear, and it is what people underestimate most at the start. Long-term investing takes consistency, but not daily attention.
What is worth measuring before you start
I am not telling you not to trade. This is general education, not a recommendation. But anyone who does should use only money they can afford to lose, and measure from day one what is really happening in your account: the result after costs, the maximum drawdown, which trades give you money and which take it away. Without data all you have is memory, and memory flatters.
One main culprit remains, and it comes free with your account: leverage. It is what turns a small mistake into a large loss. In the next article we look at it with numbers.
Risk warning: leveraged products such as CFDs are complex and can produce rapid losses, even greater than the capital deposited. According to the CNMV (press release of 12 July 2023), between 70% and 90% of investors who trade CFDs suffer losses, depending on the firm. The numerical examples in this article are illustrative and do not indicate future results. They are not suitable for all investors.
For educational and informational purposes only, published on 10 November 2026. This is not financial, tax or legal advice, a personal investment recommendation, or an offer or solicitation to buy any product. Past performance is not a reliable indicator of future results and all investing involves risk, including loss of capital. Figures and rules may have changed since publication. Consult an authorised professional before making decisions. Author: Eduardo Cumplido, EFPA EFA certificate no. 35.181. The certificate accredits training; it is not an authorisation to advise.