The online world of contracts for difference (CFD) trading is not that difficult to understand. The easy trading makes it possible for everyone to learn how to trade CFDs in their own way.
In this article we will mainly look at the top 5 most common mistakes with the online trading in CFDs. Before you know it you will also be a real trader!
1. Don't choose too high a leverage
It is important not to opt for a (too) high leverage. This is the mistake most often made by the new traders when it comes to 'euro dollar-scalping† They see all those returns and think that they too can set considerable leverage in one go, in order to complete a nice sale. However, with the high leverage you can also lose a lot of money if the price does not go as you had hoped.
If your leverage is too high, there is a relatively good chance that you will not be able to pay it all back. Of course you don't want this. Therefore, set a certain limit for yourself (how much do you want to go?). If you stick to this, the chances are much greater that everything will turn out well.
2. Don't lose more than you want to win
It is important that you never lose more than you want to win. What exactly do we mean by this? Don't look at the numbers, but always keep it realistic for yourself. By realistically looking at the opportunities and the markets, you can always be in control of your profit and investment. It is more convenient to make a small profit more often than once a large profit. This has to do with the fact that the loss will also be higher at higher returns.
Better to play it safe first; this way you avoid seeing red numbers instead of green ones. It is never a good idea to go full in the red, because losses make people lose sense in the market. So don't be fooled by all those promises and returns; it is never as much as is claimed. You should also keep in mind that as a new trader in the field of euro dollar-scalping takes a little getting used to. So it is better to take a little less risk first.
3. Don't trade too much
It is not good for your "trading career" to trade too much. If you bet too much capital at once, you run too great a risk when trading. There are too many directions you can go and chances are you will lose control. In addition, trading too much will make you potentially overconfident, allowing you to make mistakes that will cost you high in the future. It is better to use some of this time to keep your knowledge up to date.
By working this way, you can make your investment even better next time. This is better than having too many trading positions open at one time. So: don't trade too much, but keep it limited if you want to maintain some degree of control over your investment in the online CFD market.
4. Don't let your emotions affect you
The traders are often emotionally attached to the investment they have made. When they make a loss, they take it personally. They think they have had bad luck and/or that the market will be good for them later on. This is of course nonsense, because karma does not exist when trading CFDs. It's a market that doesn't care about feelings.
This is also the reason why it is important that you always keep an emotional distance between your feelings and your investment. You should see it as a course of action and should not think that luck and misfortune are involved. The markets do not move by feel. By remaining realistic and putting things into perspective, it is possible for everyone to profit, take profits and accept losses.
5. Don't chase the loss
As a final tip, we can give you that you should not want to run after your losses. In most cases you want to start earning back the lost money right away, but that doesn't always work. It just happens that sometimes losing is part of it, and this is really not always avoidable.
When something doesn't work, it's time to stop; even though you have spent a lot of time setting up a trading position† You don't want to end up with only loss at the end of the day when you could have easily mitigated it. This tip therefore coincides somewhat with the first tip. By staying realistic, you get a better result than if you act emotionally.