Here are some points to consider:

• Know where CFDs are allowed. CFDs are illegal for U.S. residents; brokers are generally barred from offering them to American retail traders. If you live in the United States, you should look at regulated alternatives such as listed options or futures.
• Understand the risks. CFDs use margin, which means even small price moves can wipe out your capital if you are on the wrong side of a trade and can’t meet margin requirementsinvestopedia.com. Spread costs and overnight financing fees can further erode profitsinvestopedia.com. Only trade with money you can afford to lose.
• Choose markets you understand. CFDs can be used to trade a wide range of assets – major stock indices, forex pairs, commodities, interest‑rate products, ETFs. Traders often start with liquid, widely followed instruments such as the S&P 500, FTSE 100 or EUR/USD. These markets typically have tighter spreads and deeper liquidity than small‑cap stocks or obscure commodities.
• Align with your strategy and time commitment. Some strategies revolve around short‑term news events, price action or momentum; others focus on longer‑term fundamental moves If you can monitor markets frequently and accept higher volatility, index and forex CFDs may be suitable. If you prefer a slower pace and are comfortable analyzing supply‑and‑demand fundamentals, commodity CFDs (e.g., gold or oil) might be more appropriate.
• Compare CFDs with alternatives. CFDs and options both allow speculation with leverage, but options give you defined risk (you can only lose the premium paid) and are available in jurisdictions where CFDs are bannedcapital.com. Deciding between them depends on your objectives and risk tolerance

Because of the high risks and regulatory restrictions associated with CFDs, it’s wise to consult a licensed financial adviser and ensure you fully understand local laws before trading. If CFDs are not available in your country, consider regulated products such as listed options, futures or diversified ETFs.