Regardless having a demo or a live trading account, you should apply certain skills and knowledge to make your trading a successful one. The following tips have nothing to do with becoming rich within few days but they are to help you establish a substantial range of skills for trading CFDs, Forex, or any other market.
CFD Trading: Short Overview for the Beginners
CFD (Contracts for Difference) trading is the ability of buying or selling on the financial products’ rise/fall. It gives you an opportunity to trade share Forex, CFDs, Commodities and Indices. The brokers around the world usually offer tens of thousands trading tools. With CFD you are able to trade on margin the same goods and products you usually trade on the share markets.
CFD Trading Tips
• PPC or Preserve Precious Capital
It means that you don’t have to chase to earn much money but to try not to lose any. So, your goal is to make your losses as small as possible.
• Have an edge
You must have an edge in the markets. All the professionals are going to earn money on you in trading, so you have to be really confident about your edge. Improve your financial situation constantly. When we talk about having an edge, we mean creating a money management plan, being patient and look for great opportunities, etc. Always work hard on minimizing your losses.
• Use stop loss feature
It’s again about minimizing your losses, and stop losses really make sense in that situation. You can easily go emotionally charged when the market is falling. So, set up your stop loss and stick to it always.
• Your CFD leverage should be controlled
Don’t be guided by your emotions only, remember that each of the CFD positions renders certain risks. Always try to start small with your leverage, let your overall exposure to remain lower than your capital base. At the very beginning, start from zero leverage to a maximum triple size of your account size.
• Set your goals
Set a rule to stay in game within your first year at least. When someone doesn’t know where to move he will get nowhere eventually. So, make sure what exactly you want to reach and focus on it every day. Don’t distract from your goal.
• Define a trading plan
Whether you are a mechanical system or a discretionary trader, you should have a plan, containing your entry, money management, and risk management strategies, your in-profit and initial stop losses.
Having a plan isn’t enough. You have to be disciplined enough to stick to it. If it appears it doesn’t work, then create a new trading strategy.
• Stay positive
Don’t make CFD trading a matter of life or death, be positive, make sure to learn the strategies and read some guides to successful trading. If you took your time to create an edge, catch your chance for a great win.
Look after your CFD account regardless the broker you choose and good luck with your trading 2018!