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Four tips to help you become a more profitable CFD trader

by , 21 October 2014

Trading contracts for difference (CFDs) can be a great way to make money no matter what the market is doing.

But to be a successful and profitable CFD trader requires discipline. You can't approach CFD trading as you would investing in shares. As CFDs are geared products, the risks are greater.

So what steps can you take to become a better CFD trader?

Read on to find out…


Four ways to improve your CFD trading

CFD trading tip #1: You need to act quickly


When your CFD trading strategy reveals a potential trade, you need to act quickly. You can’t wait around for a day or two to mull it over. The market moves too quickly.


CFD trading tip #2: Grab your profits


When a CFD trade moves in your favour, it’s easy to hold on hoping for bigger profits. But this can be the death of a trade.

Once your trade hits your take profit level, close you trade and bank your profits. Making small, regular profits is the key to making money over the long-term.

Aim to bank profits when your trade is 10% to 20% in the money.


CFD trading tip #3: Don’t have too many open positions


The more CFD trades you have open, the harder it is to monitor them.

So try to keep your open trades to a manageable size. Otherwise you’re leaving yourself open to missing key exit points and losing money.


CFD trading tip #4: Discipline is key to CFD trading success


Without discipline, chances are you’re not going to make a very good CFD trader. You need to know when to exit a trade. And this includes trades that are working against you.

A disciplined trader knows when it’s time to take a loss and won’t leave a position open in the hope that it will turn around.

Using a strict stop loss is the best way to overcome this. If your trade hits its stop loss, exit the position.

So there you have it, four tips to help you become a more profitable CFD trader.

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Four tips to help you become a more profitable CFD trader
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