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The Rules of Online CFD Trading in Today’s Economic Climate

Online CFD trading is perceived as having limitations and problems. The fact is that it has very few limitations and problems and only at very large trade size.

Online CFD Trading for Retail Traders

Online CFD trading to retail traders, is very powerful. And it has almost no limitations. As all the key CFD benefits are always there, while trading at less than $100 per point. Which is a massive limit for all retail traders. Profitable CFD trading has no rules and limitations. And no single rule in trading is really seen as a rule. Since it can be bent or broken if the situation requires doing so. Online CFD analysis takes into account the latest market data, such as volatility and price patterns. All classic rules, if necessary, can be broken. Profitable traders may for example add to losing trade, or go against the trend. Classic trading rules are useful, but they cannot apply to the markets in a simple way. The concept of a black and white world and sets of absolute rules is totally naive. And only lawyers and judges work by their book. In all other professions, rules can be ignored, bent or broken. In the real world, rules are broken all the time out of necessity. Doctors and surgeons for example, when off duty, and faced with a high risk medical emergency, know no rules. So instead of calling an ambulance, they will improvise and operate on the patient, right on the spot. That’s the nature of the real world, and determined people know no rules. When it comes to CFD trading, rules apply most of the time. But wise traders do break these rules when needed.

Today’s Economic Climate and Changing Financial Markets

Online CFD trading continues to excite traders. Because it offers them unique access to these markets. The markets do change and react to geopolitical events. But markets are made to deal with risks and uncertainties. Markets are changing, currencies and commodities change over time. Though the ones that have quality and a reputation will always be around. The biggest change recently was the advent of cryptocurrencies, such as Bitcoin. A currency which experts believe will become a solid, reputable market to trade. Just like the US dollar is today. Bitcoin breaks no fundamental numismatic rules, and it seems promising. More so because it keeps on recovering from every single price crash.

Online CFD Trading and Cryptocurrencies

CFD trading will be made fully available on cryptocurrencies. Because these cryptocurrencies, will eventually become normal. And will be accepted globally, as a means for doing global trade, on any scale. CFD trading platforms will facilitate cryptocurrency trading. And this is expected to make the world better and more efficient. Trading liquidity in established cryptocurrencies will increase. As will people’s trust. And many more people around the world will be involved in specialized commodity and currency trading. If Bitcoin does become the currency of choice for people transferring money between countries. It will help save entire billions of dollars in bank wire transfer fees. And Bitcoin will become to money transfers, what the US dollar is to crude oil today.

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Day Trading and CFDs – The Facts of Online CFD Trading

Online CFD trading enables many wise traders and classic investors to reduce volatility in their stock portfolios. And to also profit from tiny market moves.

Online CFD Trading Offers More

Online CFD trading offers more to traders and investors, much more than any other trading instrument. To those that know what they are doing, and how to handle market risk, CFDs are priceless. Of course, there are many less experienced CFD traders who are losing money. But even when one is losing money is still better off with CFDs. Even the worst traders out there. Because they would be losing more and faster, had they been trading through other instruments. And this is has to do with the superior liquidity and linear pricing of CFDs. Even in a losing trade, on average, you lose less than you would through any other instrument. That’s the harsh reality of financial trading. Markets are tough to beat, most traders lose, or simply struggle too much. The trading efficiency of CFDs cannot make you a winner overnight. Traders make their own decisions. CFDs and other instruments are only vehicles for implementing those trade ideas. No CFD trading system is complete without a wise and experienced trader at the controls. Even the best trading system will fail to make money in the hands of an amateur. That’s a proven fact!

Don’t Let Anyone Fool You into Believing that Profitable Trading is Easy

Online CFD trading only becomes profitable after making a serious commitment. Trading in general, doesn’t become easy before going through a long and painful learning curve. Only traders who have been through many hard times, are able to now trade easily. CFD trading however can enhance many retail trading strategies and concepts. From day trading to investing-like trading. And the longer one trades, the more apparent the benefits of CFDs become. Since every losing trade loses less money, and every winning trade makes more money, that they would otherwise. Investing in foreign currency markets through CFDs is also perfectly possible. As CFD trades can be held for indefinitely long. It is wiser to start trading on the longer time frames first, and then move onto the shorter ones. Because risk and stress management are hard to manage in fast moving markets. Day trading is a good choice for those who have already used CFDs in longer term trading, and know how to use them best. It is also wise to stick to one familiar market, and do day trading on that.

Online CFD Trading Using Level 2

Using level 2 data is a very interesting way to explore day trading. And it is also useful for assessing signals on the daily chart also. Level 2 data is for stocks only, but stocks can be highly correlated to some currency or commodity. Therefore don’t make the naive assumption that level 2 stock quotes are only useful for trading stocks. You can use level 2 quotes for monitoring market makers actions on few key gold stocks, and then trade CFDs on gold itself. Gold is a commodity, and commodity specialists will know more about it than anybody else. But the same specialists also trade gold stocks. So it is possible for example to assess a breakout day in gold through gold stocks and their level 2 data. One can see if there are enough buyers in the market, and if their orders are filled.

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Gaining Market Leverage with Online CFD Trading

Online CFD Trading Magic

There is a good reason why most retail size, battle-hardened traders use CFDs. They are wise enough to have know the benefits of CFDs and how to use them best.

Online CFD Trading Took Stock Dealing out of the Stone Age!

Online CFD trading really has taken stock dealing out of the stone age, and into the future. Because prior to CFDs, the financial industry was made only for large investors and banks. It was simply too costly, from every perspective, for retail traders to deal in stocks. First, it was the high commissions with every trade. Then, there were the restrictions imposed by the exchange from time to time. Even though it was still possible to predict a stock price trend and profit from it, you couldn’t possibly do it in a small account. Even good traders needed at least $50,000 to even think about stock trading. Leverage was available through the provision of margin trading accounts. But it was too small by today’s highly leveraged derivative trading instruments.

Online CFD Trading is Traders Favorite Way of Dealing

Online CFD trading today is all wise traders’ favorite way of dealing in the financial markets. Because of the very powerful and unique to CFDs benefits. These are the benefits of linear pricing, and enhanced liquidity. High leverage is no big deal these days, because all instruments offer it. Be it futures, spread betting or options, all offer high leverage. But these instruments have inherently bad linear pricing. And as a result the market trades from A to B, but the trader only captures a portion of the move. Only CFDs can tackle the problem of achieving linear, maximum exposure to the market. So that the move from A to B is fully captured. As new traders learn trading and hedging methods, they realize how valuable pricing linearity is for hedging risk, in fast moving markets. In this case, CFDs make it possible to implement amazingly efficient trading strategies. Ones where overall reward is greater than overall risk. New traders are less experienced but they do bring such new ideas to the trading community. And they do make trading much more interesting.

The Edge of CFDs in Numbers

The level of enhancement that CFDs can bring in trading is phenomenal. Of course it first takes a winning strategy, to make it all happen. CFDs are not the key to going in turning one’s trading around, from losing into winning. But a poorly winning strategy can be dramatically enhanced through CFDs. For example, a poorly, primitive profitable strategy for trading stocks and commodities may only yield 10% per month, and require few big losing trades. With CFDs, the losing trades can be better controlled and made to result in much lower losses. The overall profitability of such a strategy can be doubled by dealing with these few losing trades, in a better way. That’s why hedging strategies were invented. And these cannot be efficiently implemented without CFDs. CFD trading risks are always there, because of the market’s inherent risks. But they are smaller to the risks imposed by futures, options, or spread betting. Because CFDs enable the trader to get the best filling price, on each and every trade, winning or losing. That’s what online CFD trading offers today.

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How to Get Started in Online CFD Trading

New traders interested in online CFD trading need to know how to make the best out of CFDs. CFD contracts are more about a liquidity edge, and not leverage.

Online CFD Trading for Superior Market Exposure

Many would have you believe that CFDs are all about high leverage and affordable access to the financial markets. But that’s not a very exciting reason to choose CFDs for. Leverage is also found in futures, spread betting and options. Online CFD trading does work best with leverage, especially leverage of 100:1. As all traders, more or less, need to increase the buying power of their money. The real advantage of CFDs however is with liquidity and linearity. These two benefits make CFD instruments far superior to any other trading instrument! Sometime the difference is so huge. That the profitability of online CFD Trading is more than twice that of other instruments. All other instruments offer affordable leverage also. But their pricing is horrible, and highly non-linear. Which means they are not following the market price closely enough. For you to make a profit out of small market movements. And 70% of the time, the market only offers small movements. So it is important for new traders to recognize the key benefits of CFDs and use those to gain an edge in their trades.

Hedging through Online CFD Trading

Traders of many markets, can also hedge many risky trades through CFDs. All because CFDs offer just the kind of superior linear pricing that a hedging trader needs. Any hedger who knows how to trade CFD contracts to temporarily lock in an open loss on another trade. Knows why this is so beneficial. Most of these trades are assessed by the trader, within few hours or days. Trades that are believed to be totally wrong, are closed. And trades that are believed, upon evidence, to turn around, are kept open. CFD based hedging enables the trader to save $100s if not $1,000s on all losing trades. Both temporary and permanent losers. This is where pricing linearity is really priceless. And the superiority of CFDs is best revealed. But CFDs are also more liquid. Traders are very likely to get the best filling price and without delays. Most of the time, and even in hard, volatile market conditions.

Choosing a CFD Broker and Guidance

Traders need to choose a CFD broker, one with a good reputation and feedback. New traders can safely do so by looking among brokers having satisfied clients and good ratings. CFDs and good CFD brokers can’t guarantee trading success. It’s common sense to expect to face confusion and ambiguity in the markets. Just remember that even the best traders out there face the same problem all the time. It is not possible not have any losing trades, or not to be wrong. But it is possible to trade profitably. And this is where a basic CFD guide comes in. A basic CFD guide, with a focus on one particular market, is really useful to have. New traders should think like specialists, and should focus more on one commodity. By starting trading this way, and studying one commodity well, trading will be more solid. As commodities are much less confusing than other markets. They are still difficult to predict, impossible to predict in all time frames. But it is possible to have predictability around 30% of the time that a commodity market trades. Which is more than enough to allow for profitable trades.

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How to Get Started in Online Forex Trading

Online forex trading is more than just day trading and fast moving prices. As large size market participants and investment banks look beyond the trading day.

Good Online Forex Trading Requires More Data

Online forex trading can be made much more successful. When traders take into account relationships between different countries and their economies. Even geopolitical events, and pure political decisions actually matter in FX trading. Apart from the usual fundamental data such as interest rates, economic growth, and inflation. The currency markets are also slowly but surely impacted by politics. Any decision that lessens the diplomatic power of a country. Will weaken its currency. Whereas decisions such as increasing military spending. Or spending billions in the next generation of nuclear weapons, will help make the currency stronger. Because political decisions such as these help make the reputation of a country much stronger. And foreign investors will only invest in currencies of serious, reputable countries. Attempting to forecast a currency based on economics alone, fails to deal with the reality of global trade. Global trade requires security and a sense of peace of mind. Which banana republic countries fail to provide… This makes forex trading even more interesting in the medium to long term. Because the market can easily defy bad economic news. This is certainly the case with the US dollar. At times of seemingly bad economic news. Where the right amount of diplomatic and political strength can easily sustain rally. Some forex traders test such long term trading ideas, through trading online demo accounts. The idea is to explore the possibilities of carry-trade strategies. Which are themselves long-term in nature. And to use both interest rate differentials, as well as geopolitics, in a largely funded account. In order to simulate such currency investing.

Online Forex Trading is a Serious Business

Online forex trading is seen by many traders of medium term market exposure, as a serious business. Something more than even just an investment. Just like large investment banks and large size carry-trade investors. There’s so much more to the market than just the typical economic data. And even though the economic cycle is somewhat repeating itself, making it predictable. Geopolitics and international diplomacy is unique, and exciting. A recent rift for example between the EU and Russia, brought about trade sanctions on both sides. As a result, some countries are banned from exporting to Russia, while other countries outside the EU have to export much more to Russia. The economic impact on the currencies involved is easy to figure out. But there are currencies, less obviously involved, which are also impacted by this rift.

Why the Medium and Longer Term Trends Matter So Much

All forex traders are impacted by week to week trends in the market. These trends are often hard to figure out, due to all the volatility. All technical and fundamental analysis tools provide ambiguous opinions and even more confusion. Is is only when traders think like investment banks, where they can look into the next 3 or 6 months. And think in terms of basic economic numbers, as well as geopolitics. The expectation is that the market will certainly defy some data. And that data will likely be some economic numbers. For example an economy may weaken, but the national currency will still go up. Or an economy may improve dramatically, and yet the national currency will depreciate, defying all economic analysts. Traders will still resort to trading live Forex rates in real time day trading. And in day to day trading. But the medium term market outlook will help them have a basic road-map. So as to assess market reversals and avoid major false moves.

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Best Strategies for Becoming a Top Forex Trader

The Wise Forex Trader Does Not Believe in An Ideal World

The wise forex trader knows that the world is not perfect. Neither are the various market analysis methods, all of them are expected to surprise at some point.

The Wise Forex Trader Expects Trades to Go Wrong

The wise forex trader expects their trades to go wrong, most of the time. And they start to worry when all indicators agree with one another and they seem to work in harmony. People pursuing perfection and perfect sense in forex trading end up finding out that the markets are not perfect. They simply cannot be modeled and predicted in any perfect way. Online forex trading is governed by rules of uncertainty and risk. There are no absolute objectives to accomplice, because the market does not allow for such naive trading strategies. And yet, this is what most people would expect to achieve in the markets. Because in some other aspects of their lives they have a lot of control and can make some perfect predictions. The markets are not like that, and it is naive to even think that someone out there has all the answers. As if the markets are run by some secret code that it is possible to crack. The humble forex trader knows that the world is not perfect, and neither are the markets they trade. So indicators and methods of analysis will be somewhat messy at all times. That’s why forex trading is so tricky and difficult. And all this inherent risk is what makes the markets work.

How the Wise Forex Trader Trades

The wise forex trader maintains flexibility in their trading account. Therefore all trading strategies used must offer flexibility. CFD trading accounts offer the infrastructure needed to implement such flexible trading strategies, the rest of the work is up to the trader. The best strategies for success offer all this flexibility. And as a result, the complexity of the markets cannot put them out of balance and into unsustainable losing streaks. Whereas rigid, well defined strategies either fail to engage the markets long enough, due to small size stop loss orders. Or they are whacked out of balance by the markets, to the point where losses are not sustainable.

Best Strategies for Success

One can trade forex profitably by employing large size stop loss orders. Notional stops in the time domain, and hedging tricks for limiting some of the losses on the trades gone wrong. And not surprisingly, after doing basic research traders will find that they are better off using high risk-reward ratios. Ratios that forex educators usually do not approve. By working upon these principles alone traders can achieve greater flexibility and absorb the shocks on their accounts, induced by the forex market.

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