Contracts For Difference trades are unique amongst investments in that you do not know both your profit and liability before entering the trade. Therefore you can actually lose more than you have placed on the trade. However they also differ from other investment types in that stakes tend to be large in comparison to the profits received. So therefore a losing trade at 10% will take several winning trades at the same level to recuperate the loss. Therefore it is essential that there is sufficient capital in the bank to allow for these losses. Losses will inevitably occur, so you will need sufficient capital to recuperate them and stay in the game.
Several studies have been made into the money management of successful CFD traders and have shown surprising results. Many top traders never risk more than 1-2% on a trade. While you will never get rich quickly with such an approach, you will also never be in danger of losing the house. Furthermore small positions provide the freedom from stress! You are never going to worry if you lose a small position and ultimately you are never going to make any money if you go broke!
One way of thinking is to ask yourself before a trade, 'how much can I lose on this trade' rather than 'how much can I win.' By simply asking that question before placing the trade you will get a feel as to whether your current money management and risk control is suitable for your CFD strategy.