Trading CFDs is not like currency trading. Many retail traders start trading CFDs after making consistent profit in currency trading. Though the technical part is similar to the currency market you can’t ignore the news data. News data might not have a severe impact on the currency market but for CFD traders, it plays a critical role. It’s true, many currency traders use the technical data to secure decent profit. You might be an excellent technical analyst still you have to focus on the news data and other important variables.
This article is going to help you to become a professional CFD trader. Let’s find out about the top 4 techniques used by elite traders in the United Kingdom.
Strong at fundamental analysis
Professional traders are very good at analyzing the fundamental data. They never take the trades by breaking the rules. The fundamental analysis gives you the upper hand when you trade commodities. Learning about the fundamental analysis might be a challenging task as you have to deal with different kinds of news data. But once you cluster the news into three main forms, it won’t be that difficult. For instance, you can always identify the high impact news just knowing a few details. During such news, you have to think very carefully about the lot size and trade execution process because the market might show a high level of volatility.
A professional broker
The importance of a professional broker is enormous when it comes to CFD trading business. You can’t trade with low-end tools or a faulty price feed. To solve this issue, elite traders in the United Kingdom always trade the market with a high-end broker like Saxo. Choosing Saxo as your primary broker has a huge advantage. You can use their free trading platform free of charge and you won’t have to think about the low-quality trading tools. So, never think about using a low-quality broker because they don’t add any value.
Trade with discipline
*** SPECIAL ALERT — May 10, 2020 — Motley Fool Stock Picks On FIRE! ****
The recent Motley Fool stocks picks, even with this COVID crisis, are STILL performing well and beating the SP500! Here are some of their most recent picks and their performance:
- Shopify (SHOP) – April 2, 2020 pick and it is already up 90%
- Zoom Video (ZM) – March 19, 2020 pick and it is already up 16%
- DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 17%
- Tesla (TSLA) picked January 2, 2020 before the crash and it is up 77% compared to the SP500 -12% so it is ahead of the market by 89%
- HubSpot (HUBS) picked December 5, 2019 and it is up 4%
- Netflix (NFLX) picked November 21, 2019 and it is up 37%
- Trade Desk (TTD) picked November 11, 2019 and up 50%
- Zoom Video originally picked Oct 3 and it is up 87%
- SolarEdge (SEDG) picked September 19, 2019 and it is up 20%
- Zoom was also picked October 3, 2019 and it is up 95% since then.
The average stock they’ve recommended is up a life-changing 346% – more than 4X the return of the S&P 500 !
Now, no one can guarantee that every pick in Stock Advisor will have the same mind-blowing returns as Netflix and Disney. But you sure don’t want to risk missing out.
Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link.
The CFD traders should never break the rules. Most of the CFD traders are long term traders so they can’t afford to make any mistake. If you open a trade, never close the trade until it hit the potential take profit. Taking trades with an emotional approach is also a great mistake. You have to create a trading journal and follow the rules. Those who are new to the trading industry might not understand why it is so important to trade this market with strict discipline. But if you trade for a few months, you will notice all the big losses are nothing but the result of not following the rules.
Develop a strategy
The professional traders always use a valid trading strategy. But the traditional trading strategy is not going to work to deal with the CFDs. It must be developed based on technical and fundamental analysis. Once you have the perfect trading method, you won’t have difficulties in dealing with the CFD market. Before you take trades in the real market, focus on the market dynamics, and try to boost the profit by taking logical steps. The strategy must not be complicated as that will increase the chances of losing money.
Trade with a low leverage account
The professional Forex traders love to trade with a high leverage account. But in CFD trading, you should never trade with a high leverage account. Trade with the low leverage account and think about the swap. Since the trades will be opened for a long period of time, it is important that you know the details of your trading cost. Once you become good at analyzing the trading costs, you will understand the importance of a low leverage account.
Using excessive leverage is very risky. It gives you the power to take the high risk which can cost you your capital. The safety of the trading account should be a priority, no matter how good the trade signal is.
INVESTING TIP #27– HOW TO GET FREE STOCK!
Get Up To $1,000 in Free Stock with Robinhood–the
Open a new account and receive one free stock valued at up to $500! Then, once your account is open, get more free stocks (value from $5 to $500) for each friend, family, person you refer!
USE THIS LINK to get started with Robinhood!