There are only 3 things required to be a successful CFD trader.
1. Manage your risk.
2. Follow a proven strategy
3. The discipline to follow the strategy
Stops Are Essential
Stop orders can be used to provide protection when trading. The stop orders must be placed into the market to protect your capital.
The market can move very quickly and a stop placed in the market will exit you from the position, even during volatile times. Realising a small loss is much better than holding on for that loss to get bigger.
With CFDs it is possible to lose more than you have in your account, so it is vitally important that you use stops to limit your risk.
To Profit or Not to Profit
The next piece in the puzzle is to develop a profitable strategy. There are many ways that you can do this and there are many different strategies that you can follow. The right strategy will depend on you.
As a start the strategy must be profitable in history. There are many programs available that allow you to test your trading ideas out to see whether they work or not. But just because a strategy works in history, does not mean it will work in real time.
Most traders do not follow a profitable strategy and as a result do not achieve the results they wish to. Following the market movement will have you buying at highs and selling at lows. Before you start trading make sure you know what your strategy is and that it works.
Follow Your Rules
The discipline to stick to your strategy can take time to develop. It is not always easy to do this.
Every strategy will come into tune and go out of tune at different times. When your strategy is not in alignment with the market conditions you must be prepared to cope with this. It is important to recognise whether this under performance is temporary or permanent.
It is also important to recognise when the trading strategy is not working within the parameters of history and not to continue to follow a failing strategy.
Following your trading plan can be very difficult, just like following an exercise plan can be difficult to do.
These 3 CFD tips are easy to understand and can make learning to trade much easier, but it is still likely to take some time to master them. The endresult is well worth the effort.
1. Manage your risk.
2. Follow a proven strategy
3. The discipline to follow the strategy
Stops Are Essential
Stop orders can be used to provide protection when trading. The stop orders must be placed into the market to protect your capital.
The market can move very quickly and a stop placed in the market will exit you from the position, even during volatile times. Realising a small loss is much better than holding on for that loss to get bigger.
With CFDs it is possible to lose more than you have in your account, so it is vitally important that you use stops to limit your risk.
To Profit or Not to Profit
The next piece in the puzzle is to develop a profitable strategy. There are many ways that you can do this and there are many different strategies that you can follow. The right strategy will depend on you.
As a start the strategy must be profitable in history. There are many programs available that allow you to test your trading ideas out to see whether they work or not. But just because a strategy works in history, does not mean it will work in real time.
Most traders do not follow a profitable strategy and as a result do not achieve the results they wish to. Following the market movement will have you buying at highs and selling at lows. Before you start trading make sure you know what your strategy is and that it works.
Follow Your Rules
The discipline to stick to your strategy can take time to develop. It is not always easy to do this.
Every strategy will come into tune and go out of tune at different times. When your strategy is not in alignment with the market conditions you must be prepared to cope with this. It is important to recognise whether this under performance is temporary or permanent.
It is also important to recognise when the trading strategy is not working within the parameters of history and not to continue to follow a failing strategy.
Following your trading plan can be very difficult, just like following an exercise plan can be difficult to do.
These 3 CFD tips are easy to understand and can make learning to trade much easier, but it is still likely to take some time to master them. The endresult is well worth the effort.
