CFD: The best advice for trading

An alternative to traditional treatment, the CFD traders trade on the market by paying only a small fraction of the total trade value to speculate. This form of trading can potentially increase your return on investment. It should be noted, however, important that the greatest leverage, losses do exceed your initial deposit. With this danger before eyes, the following guide will give you the best advice for CFD trading, to help before you begin, prepare to negotiate. Know your market With over 12,000 commercial markets, it is important to have a market, know, understand and choose. Ultimately this knowledge will help you get a clearer picture of the direction of price movement possible in your target market and ultimately for their actions in the price list, which means that if you buy them and go to the polls or to sell and go short. Something as simple as it is now with the financial news, stock quotes, changes in the stock market and dates for the filing of the company, you can influence your business decisions. Realistic goals Business goals must be realistic and set up before you operate in a global trading system. This plan should a set of rules that can be used as a reference point when it starts. These rules should include: - The performance targets (day, month and year) - Size of trade - The maximum loss you are willing to take - Entry / exit point The last two rules are essential for managing their risks, these standards will affect where you limit orders and to place the most important, your stop-loss orders. The risk management The first tactic in their risk management is the use of stop losses to your CFD account. You can choose between a standard and guaranteed stop order, the latter offering the best protection, especially if there is sufficient space in your target market. A guaranteed stop loss is an order to close a position at a preset level for you. For example, if you go long "and buy a CFD in the UK, 100 at 5900, but does not want to risk more than £ 200 in your trading, you can use a guaranteed stop loss order of 5700th To say that the market went against you and hit your guaranteed stop loss of 5700, the trade is automatically closed to prevent incurring further losses. There is a small fee, which vary in different markets in order to provide this protection.