Five strategies for profitable CFD trading

Quick link: Just want to find a great CFD broker in Nigera? We recommend IQ Option. Click here to learn more...

Most strategy articles for CFD trading include things like how to use leverage, the choice of instruments to trade and many other technical aspects of CFD trading. Although it is very important to understand these, I would not say that these concepts are the key to effective and profitable CFD trading. In fact, the personality traits and characteristics of the trader is far more important when devising a strategy for profitable CFD trading. Here is a list of five things that I would recommend that every CFD trade takes in to effect when formulating their CFD trading strategy.

cfd strategy

1. Patience

Almost all trading plans work to some degree or another at some point but in some cases the trader does not have the patience to let the trading plan catch the biggest movements in the markets. Experienced traders have realised that markets (just like everything else in life) move through periods of trends and patterns and if your trading systems does not catch the opportunities of these when that does not necessarily mean that the system is wrong but more likely is the fact that the trading conditions are not favourable according to your system that you created and hopefully works for your trading style, time and risk level.

Are you ready to start trading with CFD? We recommend IQ Option for Nigerian traders because it is easy to start with a free account, they have low minimum deposit of 3,600 NGN, great Android/iPhone app and easy mobile verification - Click here to learn more about IQ Option

2. Having a trading system

Experienced CFD traders understand the importance of not letting emotions run their trading activity and to always formulate and document their trading system and plan to created advantages in the market place. You as a trader should have well defined rules for when and how to buy and sell, how to exit a trade and the level of risk management that needs to be applied to every trade. Your trading system and plan should be so easily defined that a 10 year-old can understand them. This might seem strange to say but if your system and plan according to your CFD trading strategy is not easily understood, you will not be able to apply these in the moment of heated trading activity.

3. Positive outlook

It has been proven by many researchers that having writing down the results of what you want to achieve actually helps in achieving them. This is why I would recommend writing down the desired results of a trade five to ten times before you make the trade so that you visualise and examine your goals. This will help you focus and have a positive attitude when entering and executing trades.

4. Clarity of mind

You should strive to have complete clarity of mind when entering in to a CFD trading day. This entails having a clear vision of your risk tolerance, which type of trades you should engage with, the results you are trying to achieve and the level of enthusiasm you have on that specific day. We as humans have good and bad days and it is important that you understand which mind set you have for the upcoming trading day before you venture in to it. A success CFD strategy only as good as your vision and insights about yourself.

5. Getting the support you need

Trading with CFD’s can sometimes be a lonely exercise since you often do not involve other people in the decision or execution of trades. This feeling of isolation can sometimes be negative towards to your trading performance and should not be underestimated. Having a trading coach to speak to and bounce ideas with is a great way of getting the support you need. Just for this, I can recommend the CFD broker AvaTrade that offers access to a free trading coach for everyone that opens a real trading account. This is a great opportunity to get the support you need so take advantage of it while it is still available.

We hope that this article on trading plans has given you the information you need. The next natural step is to use the free educational material and free demo account that our recommended CFD broker provides:

IQ Option - The best choice for Nigerian traders according to us - Click here to learn more

Share this article:
Twitter Facebook Google+

Read the next article in this category: STOP LOSS ORDERS - LEARN THE RIGHT WAY OF SETTING THEM recommends:

  • Access to all world markets with over 15k CFD's
  • Commodities, stocks, ETF, indexes and crypto
  • Leverage up to 400 times your capital on trades
  • Low minimum deposit of only 3,600 NGN or 10 USD
  • Regulated broker by strong security for traders
  • Great mobile trading app for Android and iPhone
  • Great to buy Bitcoin and other cryptos with
  • Local Nigerian support on phone, email and chat
  • Accepts all Nigerian bank accounts and cards
  • Quick and easy verification with mobile pic
  • Open an account and start trading in 5 minutes

  • Recommended articles

    Trade with oil using a CFD

    Use the leverage that a CFD provide to make profitable oil trades.