When you start your trading experience or want to move into a new area of trading, it is essential to talk to professionals about it. are experts in different fields of trading, including CFD trades, and they offer a lot of useful advice via their website. But, what are some of the top tips that they, and other traders, offer to newcomers to the market?
Trade with a plan and dump emotion
It’s true that emotions can rule humans. And that’s okay when you are watching a football match, but not so good when you are trading with real money. The key to success is to create a trading plan and then stick to it without letting emotion get in the way. A good trading plan will include what you will do in different situations based on the research that you do. And, even if your gut says that you should ignore your plan and try something different, just this once – ignore those gut feelings.
Keep losses small and accept them
Everyone makes losses, even top traders with years of experience behind them. Ask the traders at who have been working on trades for years – every one of them will have stories about losses, when things went wrong and bad decisions. The key when you start out is to keep your trades small so that when the losses come, they are also small and don’t put you out of the game.
Don’t spread yourself too thin
When you start trading, there are lots of different markets to explore, and there’s the temptation, to begin with multiple markets. Don’t do it – instead, focus on just one market and get to know it well. If you start with the UK market and add the US, the German, the Japanese and so on, you will only get confused. Choose one, learn it well and stick with it until you are confident in it. Then start with another one.
Embrace stop losses
Stop losses are your friend, and you should embrace them. They are the best way to preserve your initial capital and to help you keep losses small. Every CFD trade should have an accompanying stop built into it. And ideally, this is set in place outside of live trading with prices moving. If you don’t have stop losses in place, it is easy to get sucked in by emotion and hope that things will make a positive change soon, in a little while. Just in a minute. And suddenly, you have made a far more significant loss than you wanted.
Keep a journal
Keep a journal or record of your trades so you can monitor what is working and what isn’t. If something goes wrong, you can analyse why. Do you need to do some more training in this area? Did you choose the wrong type of trade? Did you forget your stop loss? By having a clear record of what you did and what happened, it is easier to keep track of your progress and where those missteps occurred along the way. It is also a great way to avoid repeating those same mistakes.
Learn and practice
One of the reasons that is a favourite place to trade is because they offer a whole host of information to help you learn before you start working with real money. Their idea is that you can ‘trade with us’ but also ‘learn with us’ and be in command of the knowledge you need to create that trading plan, set those stop losses and be confident in what you do before you start using real money.