Top Tips for CFD Trading Systems

CFD trading systems are developed by all kinds of traders. And each one of those tends to be different and unique. What CFDs allow these traders to do, together with their basic perception of the markets is to handle market risk and uncertainty, in a more flexible way. So instead if using strictly defined, traditional stop loss orders, a more flexible risk control approach is used. This approach of flexible risk control, usually includes a hedging trade in the opposite direction, and a large size classic stop loss order. The linear pricing of CFDs allows the trader to be wrong about the market, much more often, and still make money. This is because the hedging trade covers much of the risk involved in a trade. But without necessarily being triggered should the trade go well. For example, the initial trade might be a long trade on EURUSD, with a large, modifiable stop loss order in place. That stop loss order most likely will not be triggered at all. And then, there is a contingent Sell order set in place, to act as the hedging trade on the initial long trade. But this hedging trade will only be triggered if the market falls by a certain number of pips, or breaches a key LSS pivot level for the day. Moreover, the hedging trade can be much larger than the original long trade, and as a result an offset point will be reached for both trades much sooner, should things go wrong. And at that offset point, the two trades together will cancel each other out exactly, the trader can close them both, and also cancel the contingent order. Online CFD brokers offer all this flexibility at your fingertips, and placing these orders becomes second nature for any trader. The good thing about flexibility in handling risk, is that you are able as a trader to take more volatility by increasing the size of the classic stops. And you only need to leave these classic stops in place when more and more uncertainty comes to the market. CFD trading systems can be further refined upon these principles, and in the hands of experienced traders they do work amazingly well!

CFD Trading Systems and Confusion

Markets create confusion every day, it’s a given and proven fact. Only fools should kid themselves by not expecting confusing trading days ahead. Trading CFD for a living requires embracing this risk and intimidating confusion. And the hedging principles, through using greater flexibility, allow you to do just that. You are able to wake up in the morning, not fearing to look where your trades stand. Because you know that confusion and volatility is a given fact, and most likely today’s early move will have fizzled out by tomorrow. So you can close the profitable trade only, and then adjust the trades left, so that big risk will be limited by the stop loss set in place. Once volatility changes again, you can interfere again, and add one more trade or change size on the existing ones. Today’s CFD trading software allows traders to measure the market fast, and accurately for the purpose of placing these trades. The flexibility is amazing, it’s just that most traders are afraid to take the challenge. They see flexibility as more risky and confusing. Maybe it is risky and confusing as seen on its own, but when mixed with the risk and confusion of the market itself, the net result is much more positive. Since these two risky processes actually offset each other. That’s where accurate pricing is needed most, and CFD trading systems offer just that.