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CFD Trading Tips

  • 01

    Stay Up-to-Date with News

    Breaking news can have a big affect on financial markets, so keeping abreast of such developments can give you an advantage when trading. So for example, if there were US sanctions imposed upon a particular nation, it could affect the stock price of companies with extensive holdings in that particular country. 

    Alternatively, if the US Dollar was strong against the Yen this would benefit Japanese exports, which would in turn have the potential to send the Nikkei Index soaring. If you consider both financial and political news – both nationally and internationally - when making trading decisions, you may be able to keep yourself from making mistakes which could have been avoided had you been aware of recently released public information.

  • 02

    Pre-Market Trading Indicators

    Pre-market trading occurs before stock exchanges officially open for the day, and the figures can often present a decent indication of the level that a given stock on the market will open at. 

    Being aware of pre-market activity will allow you to predict movement in markets and react accordingly. That said, there’s no guarantee that a stock price rising or falling pre-market will continue in that direction once the daily stock exchanges open, but it can prove to be a good indication.

  • 03

    The Potential Pitfalls of ‘Ground Floors’

    When a stock plummets in value, there can be a certain attraction for traders who plan to ‘get in on the ground floor’, with the logic being that the price will now only move in one direction and is likely to rise. This is a dangerous assumption without any other indicators to suggest that the stock value will recover. There’s no guarantee that the share price will rebound, or that the level has reached any sort of ‘ground floor’ and cannot get any lower.

  • 04

    Keep your Cool

    It is an inevitability that an investor will lose money on trades at least some of the time, yet it’s still easy to fall into the trap of reacting to this loss on an emotional level. This can lead to you making rash trades and taking unnecessary risks as you attempt to recover your losses. In situations when you are in danger of making such mistakes it is often better to take a time-out from trading until the point when you are able to recommence with a calm head.

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