Successful trading – as opposed to losing – is by no means all about the successful trader picking winning trades. No one can trade and not experience losses because such things are the very facts of trading experience from which no one is totally immune.
Money management is about accepting that a large element in any trade is the random element. The market is an inexact silence and invariably a gamble. A successful trader knows that losing trades are almost inevitable and in order to manage his money successfully he must make allowance for that. Records show that many traders with a very successful record have a success percentage of barely more than 50% and the most successful rarely score more than six out of ten.
The reason that so many traders end up as losers is that their money management skills are faulty. They view the world far too optimistically and don’t take into account the possibility of a long sequence of losing trades. Here’s an example of a trader who started with $8,000 and needed $2,000 as a minimum margin requirement for each trade. All it takes is eight consecutive losses and the trader is broke (if account fees are counted in, six losing trades would do it). Bad money management can easily prove disastrous. You need a good cash reserve to guard against a persistent pattern of loss.
Every trader must have a structure for his trading policy and he must be able to manage his money. When markets move, the movement itself presents opportunities galore but the way you deal with those opportunities is not as important as having a proper trade structure and above all having enough funds to be able to cope with any losses when they come – as they inevitably will.
You simply cannot make money in the long run from entering and exiting a trade if you do not follow simple rules of trade structure and money management. Eventually things will go wrong and there will be losses. If you plan for them, you will succeed. If you don’t, then prepare to join the swelling ranks of the losers. That is the greatest lesson of all.
CFD trading is a fascinating market that holds the opportunity for many to trade without actually having to purchase a stock or bond. Almost anyone, anywhere can learn how to trade CFD (contract for difference), fairly easily, as the basics can be learned within days. Practicing and training can take place on a demo account, and if you find a good broker, they will be there every step of the way to guide you and advise you through the process of making your first trade. So how would you start to trade contracts for difference? Take a look at a few basic guidelines below.
Starting out with CFDs
The very first thing that you have probably already done is read up superficially about the subject at hand, and the many ways that you can make millions trading CFD’s. Well you should know that these articles are gross exaggerations at best; however, there is a good profit to be made trading CFD’s if you know your business well, and stick to a certain set a rules.
Research alone will be enough to determine whether you want to begin trading or whether you feel now is not the time for you. Past the basic concept of how to trade CFD, you need to acquaint yourself with how online brokers work and what markets you have available to you at certain times of the day.
Finding the right broker for you
Finding a reputable and reliable broker that meets all of your needs is a vital way to ensure that you get a good start. There are hundreds of good brokers out there that offer CFD trading to anyone, almost anywhere in the world. Scrambling through these hundreds of reputable brokers is difficult, messy and confusing, unless you set a few stipulations on what each should offer you. Narrowing the brokers services down to a few basics such as:
- A 24/7 customer service
- The ability to contact them directly via telephone
- Good customer ratings
- Low fees in general. Charge rates per trade or spreads and margins
- Ease of access and trade
- Multiple markets to trade in
How to trade CFD as a beginner
Every beginner needs to do their own homework, and the very best place to do this is on the brokers website. Brokers usually have hundreds of articles and tutorials, written by their experts – all to make your trading start a little easier and smoother. Brokers want you to succeed, your success and happiness, is theirs too. Don’t be afraid to contact your broker with any questions before opening an account and depositing. You are the boss here, don’t rush for anyone, you will begin trading only, when you are ready. Ask for a demo account to practice to how trade CFD before you go live with real money. Demo accounts offer invaluable learning on how to trade CFD, without the risk of losing your deposit. Once you are satisfied with your trading skills, you should move on to a live account, where you can begin to trade in the live markets. There is not set number that a beginner should trade in at first, but as a general rule, its best to keep to under 10 trades a day, to help better manage your investments. Day by day you will see the difference in how your trading skills will improve. Learning to manage losses and wins to find the right balance will be tricky at first. But within months you should be well on your way to becoming an experienced trader, and hopefully, making a good daily profit!
Here is a scenario: I am aimless in my career, with a dead-end job that is going nowhere. I want more. Then a question pops into my head: How much do day traders make? The answer to said question will determine how much time I will dedicate to pursuing day trading education and how soon I should start.
The short answer is: it varies. Some day traders make a lot, some day traders make a little. Much of that discrepancy depends on the skill of the traders, how much markets are moving and how quickly those moves can be taken advantage of.
How Much Do Traders Make?
Here is the story of one successful trader in the summer of 2016. He make some really excellent moves and booked just over $94,000 in profits. How? He had the benefit of learning from Warrior Trading. It is one of the premier momentum trading education sites on the web, with courses, chat rooms and all sorts of strategies to get nascent day traders into the markets and in the black safely and quickly.
The instructors at Warrior Trading stress the idea of practice. Put your time in in a trading simulator before risking real money in the stock market. You need to put their strategies into practice before venturing out in the shark-filled waters of daily investing. It takes time and effort to understand how the markets move during a single day and how to take advantage of those movements.
And it takes time to learn the art and science of risk management. That is one of the keys to being a successful day traders. Before you research the question, “How much do day traders make,” and get visions of massive profits piling up in your bank account, you need to understand how to mitigate risk when you are in the market.
Every trade you make carries some amount of risk. Every. Single. One. And in day trading, you have to make quick decisions in order to jump on movement or take a step back and push away that risk. One quick and easy rule to follow: if you cannot double your risk in profit, do not make that trade. Just walk away.
Some of you may be skeptical. That is understandable. Head on over to https://www.warriortrading.com/how-much-do-day-traders-make/ and take a look at the verified broker statements on that page. They prove how much traders make.
Here is the question: How much do you want to make? Put the time into learn day trading strategies and the sky could be the limit.
Some time ago, we posted an article listing day trading as a favorite high-risk investment. To clarify, while there is certainly a lot of risk and stress involved in making minute-to-minute decisions on temporary investments, day trading is actually a fairly common profession among those who see the stock market for earnings potential rather than savings opportunities. It’s easy to see the appeal. If you feel prepared to take on the market, you can work from home and possibly work your way into a sustainable or even high-earning job.
However, to do so you need the right equipment and tools at your disposal. You can’t just open up a laptop or boot up an old desktop computer and start trading stocks. At least, if you’re going to be taking things seriously. Instead, here’s a look at some of the recommended equipment to have on hand.