If you want to be successful in the world of share & CFD Trading, there are certain cfd trading mistakes that you need to avoid, here are some to watch for.
#1: Not thinking decisions through:
Trading decisions need to be thought through and should not be made on a whim.
To avoid random decision making, make a plan for yourself with set rules. For example, tell yourself that you will not enter the market before certain standards have been met, and the same for exiting a trade. Planning is key!
#2: Using stop losses incorrectly:
CFD trading needs to be done with a stop loss, or else there can be disastrous results. However, stop losses need to be used correctly or else traders will not make much profit.
In order to avoid this mistake, take normal price movements into account and use the ‘Average True Range’.
#3:Using too much leverage:
This is a common mistake, as using all the leverage available to you will result in very little room for error, and this can cause damage to your account.
There is always a chance for market movements against your trade, so you need to be careful. Implement effective leverage strategies which will give you enough breathing room.
#4: Applying the wrong strategy to the wrong market:
It’s all well having a good strategy, but it needs to perform in the right market in order to see results. If you find that you are experiencing a high number of losses, it could be due to the market condition.
Have a look at the types of markets you are trading in, and make sure that they align with your strategy.
We hope that you take this mistakes into account and use them to improve your CFD Trading skills, compare CFD trading companies now!