This can include Forex, indices and commodities with hundreds of different markets. You will need a good trading platform to make trades, and you will need to develop a strategy to succeed. Here are some tips on how to do so.
Save your capital
In the book High Probability Trading, Marcel Link talks about "preserving precious capital" when you start trading CFDs. In other words, the emphasis is not so much on making money as on not losing it. The trades are done cautiously in order to preserve the capital you have invested in the venture to continue trading. Even the best systems in the world only work if money is invested in them.
Get a trading edge
Everyone wants to make money and will gladly do so at your expense. Consequently, you need to create a trading advantage that helps you be the one who makes money, not the one who loses it. There are many ways to do this, including:
You are great at not making mistakes
You trade quickly and react to news events affecting your market.
You have brilliant money management skills.
You are very patient and wait for the right time to trade
Your trading advantage may consist of several factors or a single skill which you focus on to make CFD trading work for you. We all have weaknesses and challenges that we are not so good at, so focus on leveraging your strengths and minimising your weaknesses.
Keep an eye on that leverage
CFD leverage is a powerful thing, and when trading is going well, it's easy to have fun and increase the size of the positions you work with to make more money. But always remember that there could be a loss around the next corner.
Don't throw yourself into an emotional rollercoaster where you lose control of your leverage, making big profits and losses. Instead, start small and keep your overall risk exposure relatively low compared to your capital base. When first starting out, use a maximum of three times the leverage of your account size.
Using CFDs stops automatically
As with leverage, you need to learn how to work with CFD stops to be successful. Each trade should be assigned a clearly defined stop, ideally outside of real trading when prices are moving. The idea of a stop is simple - it takes the emotion out of the decision because you have already made it. Don't change a stop after it has been set!
Set realistic trading goals
Every trader wants to make a lot of money and become famous for their phenomenal trading skills. But any successful trader will tell you that it's not really that glamorous. You set realistic and reasonable trading goals and work towards achieving them. First it's about learning your strategy and preserving that capital. Then it's about building on what you've learned and increasing your profits. But always be realistic about what you aim to do.
Find the right platform
There are many platforms you can trade on, and it's important to find the right one. Jones Mutual offers an excellent balance of features as well as ease of use, and offers plenty of advice and tips to get you started in CFD trading. You can register an account on https://exnessgroup.org/ today and start trading straight away.
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