It’s important to do your homework before jumping straight into CFD Trading. Identifying a number of strategies, and sticking to them is the difference between falling at the first hurdle and a long-term career in Financial Trading. Here are some to keep in mind when you get started.
While you’re learning the ropes, this applies to everything.
- Focus on a small number of the market: Really get to know the markets you’re trading in. Thoroughly research your chosen markets and become an expert in your field. Read up about them every day, find out what makes them tick, whether they follow a pattern of fluctuation over the course of a day, week, month and what economic reports impact the market. Investing in no more than three different markets at a time will allow you to focus properly on them.
- Make small trades: This is especially true when you’re just starting out. But keeping your trades small will serve you well, whether you’ve just started trading or you’re well-seasoned. Trade to minimise loses, rather than to maximise gains.
Trade to Suit you.
Do you thrive on adrenaline? Or are you someone with a low-stress tolerance? Know yourself and strategize accordingly. CFD Trading time frames can be anything from a few minutes to a few months, make sure you know what suits you. Ensuring you are relaxed and confident will keep you in the game longer, both for the you who needs to enjoy trading every day and for your numbers.
If you love the excitement, opt for short trades, but long trades can be just as lucrative if you’ve followed Step 1. Remember to keep your emotions out of it, all the hope in the world isn’t going to impact the market.
Have a Plan.
Have a goal and make a plan to reach that goal. Don’t just jump straight in, research, research, research, know everything there is to know about what your about to do. Keep a record of all the trades you make and their outcomes, this will help you plan in the future and avoid making the same mistakes again.
Having, and sticking to, a well thought out plan will help you not only achieve your goals but serves as a barometer for when you deviate. As soon as you notice you’re not on course, go straight back to your plan. Trading can be incredibly emotionally charged and it’s important to notice when your emotions are affecting your decision making, and resort back to the logical, well-reasoned and researched plan you have in place for yourself – be patient and have confidence in it.