CFD Trading Tips

CFD Trading Tips

  • Preserve Capital: Do not be tempted to overtrade. Remember that CFDs are leveraged products, hence you can lose more than your initial investment. Your goal should be to keep losses to a minimum and to hedge your assets.

 

  • Keep the Edge: Watch out for professionals who aim to strip you of your money. Keep up to date with trading movements and ensure you have reliable sources of information, so you have the edge over other CFD traders.

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  • Control CFD Leverage: When the market is moving in your favour, it is tempting to keep increasing your position size. Remember, however, that what goes up must eventually come down. Therefore, it pays to be mindful. Start with a small leverage and keep your exposure low in relation to your capital base.

 

  • Remember Your Stop Losses: Use CFD stop losses to minimise any losses you may incur. Ensure that any trade you enter has a CFD stop assigned. Ideally, the stop should have been determined outside of live trading.

 

  • Have Clear Goals: You need to have a clear focus as to how much money you wish to make and over what period of time. In your first year of trading, your primary concern should be to keep your account in order.

 

  • Keep a Record: Make sure you record the trades you make in order to keep track of your performance. Such a journal will be useful to look back on. The journal should include what you bought or sold, the profit you made or the loss you took and the reason for the trade.

 

  • Bide Your Time: Remember that there will be periods of the year when your account is quiet and other times when lots of trades will be taking place. Hence, preserving your capital during the quiet times is essential.

 

Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.

 

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