An effective trader of CFDs can be distinguished through his decisions and strategies. More often than not, an effective trader is also someone who knows where his chosen strategy will lead him. He does not always win with his positions but most of the time, he knows how to alleviate the problems in cases where his decisions lead to an opposite outcome. For novice traders, it is always their greatest dream to master the art of planning and performing a strategy in the market. Here are some guidelines that will hopefully help you out with your strategic planning.
1.Strategies should be personal
Since your trading strategy defines your preferences, experts say that it becomes more effective when you pick a strategy that is close to your personality rather than it’s fame.
2. Be true to yourself
If you find yourself unhappy with a currently chosen style for trading, then it is probably time to assess yourself. Are you holding onto a strategy for such a long time because everybody thinks that this is the best strategy based on the advertisement which was posted on the internet?
3. Learn the numbers
Trading is not for math haters as you have to deal with numbers all throughout your trading experience. To give you a simple illustration, a particular trader needs to calculate for the expectancy each time he makes a transaction so as to have an idea on how much money he will gain for profit. Expectancy is calculated using the formula (Win % x Average Win Size) – (Loss % x Average Loss Size). If the difference turns out positive then the trader has placed a winning position. However, if it goes the opposite way, then he has lost his position.
4. Accept changes in market rates
CFDs are very flexible financial instruments so it is a must for a trader to naturally adapt to its behavior in the market. When analyzing the chart, there will be times when the flow would demand for a sudden change of strategy. Thus, you have to be ready to experience a roller coaster of applying various strategies in a particular trading session.
5. Keep track of your profits and losses
Wise traders list down their strategies in a particular trading session and analyze whether the strategies used for the day has brought them more wins than losses.
6. Assess your own skills
Apart from conducting self assessment on your trading style, you also need to check if you’ve got enough skills in analyzing trading details such as signals and risks. Keep in mind that trading is a battle and your goal is to win it by having less mistakes in your decisions.
7. Psychologically prepare yourself
Trading is a battle of wits and emotions, more often than not, emotional individuals do not succeed in this field. Thus, you need to make sure that you put in a great amount of focus and concentration the moment you choose to work on your account.
8. Know when to surrender
The beauty of trading with CFDs comes with the privilege of going out of the market when you feel that you are already going against the odds. It is strongly suggested that you set your own risk and firmly stick to it when you have reached it.
Final Say:
They say that 8 is a number of infinity and this may probably be real if you try to use these guidelines in your strategic trading planning sessions. Who knows they may give you infinite profits too.