CFD Trading Tips

When you start trading CFDs there are some basic tips you should follow to get the most out of your trading experience. It’s true that trading the markets can be complicated and will seem overwhelming at first, but by following these three tips you will soon be up to speed and hopefully increase your trading success.

These three simple tips are as below:

1. Focus on a small number of markets. With so many different markets to trade with CFDs, you may be tempted to try them all. This is often processed into a recipe for disaster. Instead put your focus on no more than three markets at first and you will be able to improve faster. If you focus on a small number of markets, you will have time to research each market in depth every day. You will be able to place small trades in at least one and maybe all day as well. And with each passing day and each new trade you will learn more about what makes the market tick. You’ll see normal volumes, you’ll know if the market moves more at certain times of the day, and you’ll know which economic reports are likely to move the market. This is the best tip if you want to become an expert in any particular market.
2. Determine the time frame that works best for you. Some traders love the thrill that comes from trading very short timeframes, but others cannot withstand the pressure of making split second decisions, and prefer to trade longer timeframes. Decide when you start trading if you will be a long-term trader who focuses on weekly and monthly timeframes, or a short-term trader who focuses on daily, or even moves that can happen in minutes. By using these tips, you’ll be a more relaxed trader and a more confident trader because you’re following your own personality traits rather than trying to fight your natural tendencies.
3. Have a trading plan. It is extremely important that you don’t just jump into the market without a plan. Before entering any trade, you should have completed your daily research and know whether you want to go long or short, why you plan to go long or short, where you will enter and exit your trade, and how much capital you will risk on every trade. By having all of this decided in advance, you can avoid putting your capital at greater risk than you are willing to accept. You are also more likely to avoid the mistakes that many traders make when they trade without a plan, especially those related to greed and fear

These three basic tips are not only enough to get you started in CFD trading, they will also serve you well for your entire trading career. Always remember and if you deviate from it, focus to return to the basic tips.