A) PRESERVE YOUR CAPITAL
Forget about making money; just try as hard as possible not to lose any. Every dollar you have is precious, and fight as hard as possible to keep it in your pocket and out of someone else’s.
What is the point of having the best CFD trading or share trading system in the world if you have lost all your money? Therefore your goal will always be to keep your losses small.
B) ENSURE YOU HAVE AN EDGE
It goes without saying that you need a positive expectancy trading system or an edge in the markets. In trading there are professionals who are dedicated to stripping money off you and you have to be diligent, disciplined and confident about your edge in the markets. Work hard and stay focused on keeping your edge.
C) CONTROL YOUR LEVERAGE
CFD leverage is so powerful when things are going well and it can be so easy just to keep increasing position sizes as you are winning but the inevitable loss is always lurking around the corner. If you are starting out trade from no more 5% Margin Requirements.
D) USE STOP LOSS RELIGIOUSLY
Stop losses make sense. They help minimize your loss which helps you with CFD Tip number 1 – preserve precious capital. Every trade your enter should have a clearly defined CFD stop assigned to it and ideally you should have identified that CFD stop outside of live trading.
You see it’s very easy to get emotionally charged when your position is falling rapidly and more than possible to give yourself reasons as to why your stock is going to miraculously head in your direction. It probably isn’t and HOPE is not going to help. Define a CFD Stop outside of market hours and stick to it.
E) ESTABLISH CLEARLY DEFINED, REALISTIC TRADING GOALS
Simple Goal writing procedure
* Identify what it is you want
* Focus on it daily
* Kill all distractions that move you away from your goal
F) HAVE A WELL DEFINED TRADING PLAN
Then when the market turns its time to start adding aggressively to winning positions. All the greatest and most successful traders in our time have learnt this powerful strategy.