If you feel that you are not getting the most out of the trading opportunities available with CFDs trading and wish you could kick-start it by learning and discovering new strategies then read on.
We have a few tips and strategies that will help you to boost your confidence in on-line trading CFD’s (contract for difference).
Have a plan or strategy and don’t deviate from it. This requires self-discipline. Sign-up with a broker who offers a free demo account. This way you can apply your strategies and techniques without risking your money.
There is a wealth of financial tools and forex education resources that will help you to make the most out of trading CFDs and put you on the right track to building a profitable trading business.
Knowledge is everything and paves the way to success
The first tip is to learn about the different asset classes and their trading characteristics with regards to forex, commodities, stocks, indices, options and ETFs.
Different asset classes have different characteristics, like volatility, leverage risk reward rations and liquidity that are not the same for all of the financial instruments.
We can’t emphasize enough…
The importance of not deviating from your strategy and sticking to your plan. You can get carried away with market volatility and get tempted to deviate from your strategy, resist and avoid the temptation.
Speaking of which, you should never trade with money that you cannot avoid too loose. With CFD trading, there is an opportunity to make lots of money and lose money, it is volatile.
Trading tools and graphs
These are crucial and plays an important role to the success of your trading. Plus500 forex and CFDs provider has some of the most advanced trading tools available for their traders.
Some of the tools provided are alerts on price movement, change % & traders sentiments, market event announcements, sentiments, forex signals, forex calculators and more.
These tools together with the graphs gives you an indication on how the markets or the asset is performing in real time. Applying these tools to your strategy are essential for on-line trading.
Applying risk management tools
Now, you need to make sure that you go with your trading plan (which will include entries and your exits) and apply risk management tools to protect you in the event that a trade goes against you.
How do they work?
Using a ‘guaranteed stop’ will close your position automatically when the asset reaches the desired price and will close at the exact rate that you set.
For example, there’s news that US technology shares were up and you’re expecting it to go higher.
If you want to lessen the risks any huge loss due to volatility and would like to lock-in on your profits then the guaranteed stop is a good tool to use.
This tool puts an absolute limit on your potential loss and closes at the specified price with no slippage.
It should be noted that it can only be placed on:
- A new trading position or pending order.
- It can’t be added to an existing order.
- Also, once your position is active you cannot remove or amend it.
Only some instruments support a Guaranteed Stop Order. When you select the ‘close at loss’ checkbox on the platform, you will be able to see if the instrument is applicable.
You are also able to use the ‘close at profit’ tool.
This tool closes your trade at a predefined profit although they are not guaranteed that your position will close at the exact price you have specified such as in the event that the price suddenly goes down/up.
Then, it will close only at the next available price and not the one that you set. This is called ‘slippage’ so it is important for you to keep a close watch on your trade.
This tool is designed to protect your profit and minimize your loss. It can be used when opening a new position/pending order or editing an existing position.
Then there is also the ‘close at loss’ which will automatically close your trade at a predefined loss and prevent further losses.
This means that if the market moves in an unfavorable position, the ‘close at loss’ order is automatically activated.
Your position remains open as long as the market price is in your favor. (Again it is not guaranteed it will close as the exact ‘close at loss’ level, so you need to monitor your trades).
That’s not all…
Today, with CFD’s trading you have a lot of leverage. You will find that at Plus500 you will get one of the highest leverage rates offered in the market of up to 300:1.
With only a small amount of money, you have access to control much larger positions. Which means for every dollar, you have access to 300 times that giving you access to more opportunities.
With leverage, there are risks especially when trading forex so it is important to use risk management tools that are offered on Plus500 platform.
Choosing a trusted and reliable broker who offers you a good online trading experience is essential. It can be the difference between loosing trades and making profitable trades.
Important factors to look for in a reliable broker such as Plus500:
- A broker who is reputable and has authorisation from a regulatory body to offer financial services.
- A broker that is regulated by multiple regulatory bodies attests to their trustworthiness and reliability for the services that they provide.
- A range of the most popular tradable assets to choose from, this way you can trade the assets that you want.
- A platform that is user friendly and easy to use, has no time lags and offers the option to trade not only on your computer but also on your mobile or other devices. This way you can watch your trades and get alerts while commuting and have the ability to trade.
- Offers a range of updated tools so that you are able to track your activity in real-time.
- Is competitive with Bid/Ask spreads, leverage and do not charge trading commissions.
- Dedicated in providing professional customer service.
- Convenient payment and withdrawal methods.
- Informative tutorials, live financial news updates and more.