Any successful investor will tell you there are no secrets to investing. To make money in trading, you must be willing to put in the work. This includes learning all you can about your chosen market and making time to check your positions.
Therefore, the tips in this article are no guarantee that you will join the billionaires club in a couple of months. However, they will point you in the direction. If you have some money to spare and have opted to trade CFDs, these tips will help you.
Choose a Reliable Trading Platform
You will find hordes of trading platforms online. Some of them will make exorbitant promises such as making your first million in a week. Partner with a reliable platform such as Saxotrader that has the expertise and experience you need.
With a reliable broker, you will not be overwhelmed with trading fees. Also, you want to be sure that your CFD broker is not taking all your trading results.
Safety is paramount. There are a lot of scammers out there. Anyone promising Singaporean traders inflated results in a short period is not to be trusted.
Practice with a Demo Account first
If you are new at trading CFDs, begin with a demo account. Many platforms offer one. You can use it to test some strategies and get a feel of trading before risking your money. Also, it helps to prepare you for the thrills as well as the downs of trading.
Use Stop-Loss Orders
This one should be the first thing to learn when you begin trading. Ensure that you limit your downside by making use of stop orders. A stop order authorizes a broker to buy or sell depending on the trader’s position.
A stop-loss order helps to lower the risks you take in CFD trading. They also help you to be disciplined while trading. To manage risk effectively, you must stop orders according to the rules you have set.
Do Your Research
You know what a stop order is. What about a market order or a limit? Before you start trading CFDs, make sure you understand the basics. You may not set out to grasp all the classes in trading but you can study a minimal number of specializations.
Choose a Trading Position
Before you open a trade position, set up a strategy. You must know when to close a position. It helps to figure out the best and worst-case scenarios of your position’s performance.
Ultimately, you need to know how you will respond if the position goes up or down. Also, at what percentage will you issue the close order?
Avoid Getting Emotional
It is easy to get rattled when you make losses. You may even be tempted to run after your money. Take a deep breath and stick to your rules. Also, a trader may be tempted to stay with a position because they like the product and are convinced it will do well.
If you had set your stop-loss order at 15%, stick to that. Do not allow your feelings about the product to get in the way.
Spread Those ‘Eggs’ Out
Trading CFDs allows you to dabble in a wide range of markets. You are allowed to invest in a wide variety of markets which would be to your advantage. If one market takes an unexpected turn, you have other markets that may come to the rescue.
Hence, don’t put all your money in one market however much you believe in it. Markets are not always loyal and they can turn against you suddenly.
Trading CFDs can be very rewarding. However, you should also expect some downtimes. That is why you must create a strategy that works for you. Remember to do your homework and study a few strategies to find the best one for you.
Also, diversify your investments, use stop-loss orders and avoid getting emotional. Trading requires a great deal of patience as well as control. It gives you an excellent opportunity to learn to control emotion.