If you are new to CFD trading, one of the most important things you need to know is that you have to “play the game” as if you were playing sports. Do not let your emotions dictate your actions or your reactions. It will backfire on you and cause you more misery than gain. If you are a “people’s person”, then this may be too difficult for you, but most of us are not.
If you are a person who loves to stay under the radar or prefer to keep to yourself, then these tips will certainly help you. Don’t listen to what others are saying. Most of the time, the advice given about trading is a matter of opinion and has more than a grain of truth in it.
Most people don’t even know where they are going when they are sitting in front of their computer screen. If you want to find the winning trade, then you will need to do some research. You can take the information you come across in the media with a grain of salt.
Never use leverage on CFDs. Leverage means you borrow a huge amount of money at one time and then use that to leverage the price you pay to trade. This is fine if you plan on using short sales to make a killing, but if you intend to use leverage, you are going to get yourself into trouble very quickly. If you are not careful and do not plan for any eventualities, then your leverage may work against you. You may find yourself losing more money than you take in.
Try to have at least five different currency pairs in your ‘trader’s account’ when considering placing trades in the financial markets. Try to have them spread between two different market hours. By doing this, you can gain the advantage of trading closer to the actual market closing time and this will increase your profit potential. Try and make your five CFD trades before the market closes in the opposite direction or opposite time zone.
One thing you should always remember is that the more leverage you use in cfd trading South Africa, the worse your losses will be. Leverage is a big part of the trading game and should never be overlooked.
However, you can improve your odds of success with other methods. Traders that have been successful for years are often those that have used other techniques besides leveraging. It does not matter which method you choose, but the combination of all of these things combined is what makes the difference.
Lastly, make sure you set some time limits. You need to be able to set time limits for each trade you are involved with so that you know exactly how much time you have to complete each trade as well as how much money you should receive. This will help you develop discipline and know exactly when you are going to sit down to do your trade.
Some traders choose to automate their systems, while others prefer to manually perform all of their trades. There is no right or wrong answer. It’s just a matter of preference and what you are willing to do to help your forex broker along the way.