It’s true, starting as a CFD trader is much more relaxed than some other types of trading and indeed involves a much lower capital, to begin. But, that doesn’t mean you can jump in, feet first, without any planning and start making a load of money. The key to success, with CFD trading, is all in the preparation and plans you put in place.
Here are some top tips to becoming a successful CFD trader.
1. Do your learning.
One of the most common mistakes people make is they read a few blog posts and think they have it all figured out. They jump into trades and lose all their money – quickly. The key to being successful at CFD trading is in the learning and education that you obtain beforehand. You might even want to sign up with a platform that offers a dummy account to practice your trades before you use a single penny.
Learning to trade is also an ongoing process. After studying hard, you grow in confidence and start making a few cautious trades. That’s great – but keep up with the reading and watching educational videos because there is always more to learn in this forever evolving industry.
2. Find the right platform.
The platform you trade from is also essential for many reasons. You want to look at the costs involved with the trades and the ease of withdrawing your money. You want to see how secure the platform is so that you can rest assured your money isn’t going to be stolen. And, you also want a platform that offers friendly help and advice.
One example is Weiss Finance which offers a wide range of markets for CFD trading, articles, tutorial videos and even an economic calendar to help with learning and 24/7 security and assistance to help with any problems you encounter.
3. Have a trading plan.
As part of your education in CFD trading, start creating a trading plan. It will govern your trades and help you to decide what to do at any given time. It will cover everything from what markets you want to trade in, what kind of stop losses you will put in place and how you will protect your capital to continue trading.
Your trading plan will develop alongside your experience. You learn new approaches, ideas that worked, or didn’t, and new markets to try. As you expand your knowledge, you can amend and update your trading plan, so it is always current and relevant.
4. Take it slow.
One of the top reasons that people stop CFD trading is they go all in too fast, blow their capital and have nothing left to trade. Some of the best advice is to take it slow, make gradual small gains that add up. Then start trading from your earnings, preserving your capital just in case. Hoard that capital because every penny of it can be leveraged for a much more considerable amount, so you need to make sure you protect it.
While trading slowly, also keep control of your leverage. Again, it can be tempting to increase it when trades are going well but things can turn against you, and that capital can be consumed. To keep trading, make sure you give yourself a slow and steady path to success.
Finally, as you get the hang of an asset, or a better understanding of a market, don’t be afraid to diversify carefully. That way if one market takes a big hit, you won’t feel the blow as much. Learn about new assets and markets the same as you did your original one and follow your trading plan.