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!