Trading CFD without Leverage

Trading CFD with low, or no leverage at all is a good choice in some cases. Especially in CFD accounts where the objective is to trade commodities or certain types of stocks. Some stocks for example, such as penny stocks and low price stocks in general are easily affordable at 100% of their value. So not using leverage allows the trader to feel comfortable without worrying about having to meet margin calls. Trading CFD is extremely profitable in the case of low price stocks, in the hands of even partially experienced traders. These stock traders don’t fit the profile of neither classic traders nor that of classic investors. Rather, they are somewhere in between, and their CFD trading systems use logical analysis of all levels. Such stock traders may have small or even large trading accounts. They simply don’t want to worry about potential margin calls. So they use low leverage, or no leverage at all. And apply similar money management that classic buy and hold investors have been using for years. Online CFD brokers facilitate very good trading conditions which make profitability possible. Above all, they like stock trading of this type, because each stock has a different story to tell. And each company is chosen and analyzed by different criteria. This is why logical analysis prevails over all other, one-sided analysis methods.

Trading CFD with no Leverage
New ideas may be new products and breakthroughs of new companies, after the IPO. Or new strategies of long established companies with small past success, which have deceptively cheap stocks. If the company becomes a takeover target, the stock will go up. But even without a takeover, profitability for such a company may be huge. Due to not having good prior economic numbers, classic valuation models will tell you that such a stock is worthless (no past sales, low profitability etc). Only logical analysis investors will figure it out, and will also make non-leveraged, affordable CFD purchases on that stock, because it will be a cheap stock to buy.

Trading CFD through Logical Analysis

Trading CFD through logical analysis is all about company uniqueness. So that two companies in the same sector are never considered to be alike. Hence their stocks are expected to perform differently as well. Logical analysis is about analyzing technological trends. And how technology and new products render other products obsolete. Most of these trades are based on time frames of around one year long. But many more smaller weekly and monthly trades can be made over that period. Stock CFD traders want to see stable trends, and trades they understand. Penny stock trades also work the same way. As most penny stocks are relatively new stocks, without much prior history. Classic stock valuation models will tell you that such stocks are worthless, or that are exactly right priced. But these models fail to deal with logical analysis, and always fail to predict penny stocks that break out. In general, it is not wise to apply technical analysis or fundamental analysis to any new, low price stock. The question is what does the underlying company do, and how likely it is to succeed. If it is going to be successful, most classic analysts will be oblivious to the signs. Stock traders can infer good CFD trading signals from this logical analysis. And because most of these stocks are very cheap, there is no need for much leverage.

A Simple Forex Trading Strategy

Crude oil can offer a simple, reliable forex trading strategy through the inversely correlated USDCAD currency pair. This pair trades so that it trends to move in the opposite direction that crude oil moves. And because crude oil is a relatively fundamentally stable commodity, it offers many great trends. More specifically, crude oil tends to set either linear directional trends, or range-bound sideways trading. In both cases, traders can trade USDCAD with a lot of confidence which is not found in any other pair. Foreign exchange currency trading online for beginners can be based exclusively on USDCAD and crude oil. While wise CFD traders can also temporarily hedge uncertain trades on USDCAD through trades on crude oil. There is no need to diversify into other commodity currencies either, as this will overwhelm the new trader. But one commodity such as crude oil, is quite unique, and offers all the profit potential one will ever need. Traders can make serious money trading USDCAD alone, and doing so on more than one time frames. They can practice currency trading in various ways, all focused on USDCAD. And the deeper they are able to dig in this specific currency pair, the more the will be able to handle risk and market uncertainty. A forex trading strategy doesn’t have to include many currency pairs. But it can include one commodity and one related currency pair alone.

Forex Trading Strategy
USDCAD tends to move exactly in the opposite direction that crude oil does. And crude oil offers stable trends which are possible to deal with, through technical analysis. Except for the US dollar component itself, which does not always behave as a technical currency. The trends of crude oil however tend to offset the impact of the US dollar, when looking into longer than 2 or 3 days.

The USDCAD Forex Trading Strategy

The SUDCAD forex trading strategy is nice for various reasons. The most important is the solid trend that crude oil provides from time to time. Since the entire crude oil industry is behind these trends. And this is in huge contrast with other currencies that are very country-specific, and therefore inherently less stable. And being less stable means that fundamental factors can create sudden movements in a currency pair. Movements that will easily defy all technical analysis. A good forex trading business opportunity for many beginner level traders can be perfectly based on USDCAD. But apart from crude oil itself, traders can enhance such strategies further by looking deeper into the US dollar. The US dollar cannot change the solid trends of crude oil. But it can nonetheless have day to day impacts on crude oil price, and also on USDCAD. Traders can use these intraday extreme price swings to make day trades. It also helps to know that one day’s extreme price action cannot possibly change the daily trend. And a lot of research has to be focused on the daily charts of these markets. Intraday movements are mostly caused by news, and only last for few hours to a single day. Counter-trend movements lasting for several days are corrections of the major daily trend itself, and are natural and expected to happen. But even these can be predicted to quite an extend.

CFD Trading Simulator for Pros

Traders can use a CFD trading simulator, which is either provided by their CFD broker as a virtual trading platform. Or through other available software, which accurately simulates the real thing. A good CFD trading simulator will cover the requirements of all tests. Good CFD trading systems can be based on simple logic, little curiosity, and few basic calculations. The tests needed to confirm these systems against real market movements are quite realistic. Since they include all the effects of volatility and the most unexpected moves. The concept of trading online made easy by practicing through simulation tests is real for many traders! Trading does in fact become easy, but that’s only because the hard work has been done in advance, during these tests. There is no free lunch and effortless trading. There is however well prepared trading, which does in fact work very well. Critics of paper trading argue that using a simulator is not real trading, and therefore it cannot provide serious trading. But that’s just their opinion, and is actually a premature assumption on their part. The fact is that paper trading is subject to less emotional pressure, and the testing trader actually takes more risk. Risk they would not take directly on a live account. All wise traders have used simulation software and have done paper trading at some point. After all, even a thought process is actually a simulation of reality. And there is nothing wrong with testing assumptions and ideas. In fact, even bad ideas that eventually fail, do help one’s creativity and original thinking. Wise CFD traders are wise only because they think wisely, accept failure, and are not afraid to fail again and again. And much of this is done in a demo CFD account. So that eventually they can trade a live account with confidence. Critics of paper trading do not realize that both live and demo accounts deal with the same, real underlying market. And in fact, many good trading systems are left unused by potential investors. Only because they wouldn’t allow a demo account trader to trade with their money. So instead they wait to find the super successful live account trader, to do their trading. Except that this trader never comes, either because they don’t exist, or because they prefer trading their own account.

Online CFD Trading Simulator
We are simulation machines anyway, and all our thoughts help simulate real world ideas. So critics of simulated trading talk nonsense. How real something is depends on how good the observation is. Even live account trading, under poor observational conditions, will not help the trader develop. It’s that critics cannot handle the truth, the truth that an under-financed trader can outperform their big size trading.

What a CFD Trading Simulator Does

A CFD trading simulator offers traders unique insights into techniques for handling open losing trades and uncertain trades. It’s not about handling winning trades, anyone can close a profitable trade and lock-in the profit. The hard task is dealing with risk, and losing trades. Simulated trading allows wise CFD traders to solve much of this problem. And to also make the transition from being an average trader to being among the pros. And even pro level traders continue to test new ideas once in a while. As curiosity never stops, it’s just that they become more selective traders through more and more experience. And the learning curve required devotion and accepting failures. Trading CFD for dummies is actually possible and not a far fetched scenario, and this is about profitable trading. This is because beginner trader have the curiosity to test their ideas on a demo account. And they can move fast onto trading a live CFD account. As CFD trading is very affordable, and trading size can be small. The live account trading experience, even at small size can offer all the money-related emotions that demo trading doesn’t offer. So the two accounts together make up a complete experience which does deal with the unforgiving reality of the financial markets. And it is unforgiving because there is no much room for mistakes. Wise traders learn from their failures, and move on. While easily intimidated traders quit before the battle even begins. And they are easily intimidated because of not having done sufficient, well observed simulated trades.

More Forex Trading International Market Opportunities

Forex trading international opportunities do exist in real estate investing, as well as angel investing between countries. This is because these investors can take out bank loans in various currencies available by commercial banks. These loans or mortgages dominated in foreign currencies, are defined by either fixed or variable interest rates. And the investors who are also forex traders, and know what the expected trend in a currency pair is, at a fundamental level. Will look to reduce their liability by lessening the monthly repayments on these loans. This is forex trading business opportunity within the original investment itself. It simply works on the principle, that if the loan is dominated in a steadily falling currency, against the one the investor uses. Then the loan itself becomes smaller and smaller over few years. Ultimately saving the investor a lot of money. And it may sound impossible to do, but it isn’t. Fundamental economic analysis and monetary policy, do provide clues all the time. These clues reveal which currency will do what in the long term. These forex trading international opportunities are very important. And what matters above and foremost are the trends in the currencies involved. The interest rates on the loans, are not much of a concern. Because when one deals with the US dollar, or the Swiss Franc. And other reputable currencies, the rates cannot deviate too much. So it’s all about long term trends and nothing else. On the other hand, it is unsophisticated home owners that only watch interest rates. Commercial banks tend to lure these clients into taking out mortgages denominated in Swiss Frank, on the promise of lower interest rates. But as we saw in 2015, these loans inflated by a huge amount due to the sudden appreciation of the Swiss currency. Had they been watching the fundamental trends, they would have been able to get around that. So it’s all about trends, not rates!

How to Trade Forex Profitably right

Hidden Forex Trading International Opportunities

Some hidden forex trading international opportunities also exist in various small countries, where the local currency is set to either explode or collapse. Depending on the case, the wise investor can invest in those countries, at the right time, in physical investments. Such as buying a hotel for example. This did happen in the Czech republic in the 1990s, as the local currency was too cheap. And started to slowly appreciate. Now actual forex trading and CFDs are still relevant to such investments, because there are many small month to month fluctuations throughout the long term trends. These can be traded through leveraged CFDs and help the investor further mitigate their risks, or even make a direct profit. So in effect, trading through CFDs and even partially day trading forex live, is part of any long term investor’s strategy. Because currencies do fluctuate, and CFD leverage can make these tiny movements big enough. And more importantly because one side of the trade, the risky one. Is totally covered by the investor’s long term physical investment. That’s why investors who also practice currency trading are ta a huge advantage. But make no mistake, all research begins with the fundamentals first.

The Best Opportunities are Never Announced

Opportunities regarding specific countries, products and currency zones, are never really announced or given as advice to anyone. Each serious investor must get used to the idea that they have to spend money on traveling, lots of money. So as to actually visit and see the potential countries one by one, and directly. Other travelers’ stories cannot convey potential opportunities, because they might not be as bright as you are. Some opportunities may have to do with import-export of physical products. Where again, it all boils down to fundamental currency trends and even daily fluctuations. Those who practice currency trading will know all about these concepts. The basic opportunity in the case of an import-export business, is that two currencies may fluctuate too much against each other. But 2 identical products, in these 2 countries will remain priced 1 to 1. So for example, the EURUSD rate went as high as 1.60 once. However, some products that were supposed to be priced at $1 in the USA, and 1 Euro in Germany, remained priced as such. And when one deals in a business with illiquid, non mainstream high priced products, a big profit opportunity instantly appears.

Insightful Penny Stock CFD Trading Tools

Penny stocks are interesting. Any stock under $5 is technically a penny stock, and especially those under $1 can be extremely profitable, since traders stand to make multi-fold gains out of small movements. Traders employ various CFD trading tools and methods for detecting these stocks and actually trading them. CFDs allow them to capture the entire stock price movement on the way up. And this is possible at very good liquidity, which in today’s stock market is essential. As liquidity in the stock market has been reduced in recent years. CFD penny stock traders have a huge advantage. CFD trading software can be used for planning the trades of the more risky penny stocks. Those stocks which are priced near $5, and hence have some downside risk. Trading CFD for a living through the opportunities of various penny stocks is actually possible. Traders usually pay attention to companies that could possibly merge, or companies with some unique proprietary technology. The stocks of such companies do at some point skyrocket, and it is possible even for a $0.50 stock to go as high as $17 in few days. But mergers are almost impossible to detect, and leaking of merger information from CEOs and lawyers is actually illegal, because it amounts to inside trading. In the case of technological breakthroughs, it is possible to know in advance which companies have good penny stocks. But timing the break out trade can still be difficult.

Penny Stock CFD Trading
Penny stocks are extremely profitable. This stock moved from around $0.2 to $6.5 in a few days, a gain of more than 30-fold! The only legal way of detecting such stocks is by looking for Optionable penny stocks whose out of the money Call Options are unusually high. But trading the actual moves through Call Options will either be way too costly, or non-linear, so that in this example only 30% to 40% of the move would have been captured. CFDs on the other hand are extremely linear from the start of the move, and all the way through. The entire $6.30 move would have been captured in this case with a CFD trade! And cost is never an issue because CFDs are always affordable, even at low leverage, much more affordable than in the money Options. And with CFDs the trader doesn’t nee to worry about expiry times, that’s one more critical edge. Because penny stock trading required planning trades lasting several weeks. As the exact breakout day is not known.

Using Stock Options as Predictive CFD Trading Tools

Stock Options are difficult to deal with instruments, and extremely hard to get right. But there is something cool wise CFD traders see in some stock Option contracts. It is actually possible to figure out when penny stocks are about to make a big move to the upside. By spotting over-inflated premiums in the out-of-the money Call Options, on that stock. Option brokers will know all the information about the company in question. All the information that can be legally known. And they inflate these premiums, so as to have higher premiums on these Call Options, which are typically very low for all other stocks. The problem is that most penny stocks only move by about few dollars, at best. For example they may rise from $2 to $5. But attempting to capture the actual move using Call Options is suicidal. This is because in-the-money Options are way too expensive to use. While cheap out-of-the money Call Options will only generate a tiny profit, perhaps only $0.5 even though the penny stock has a $2 or $3 actual gain! So wise CFD traders act as follows: They do look at Option premiums as part of their research, to confirm good penny stock setups. But then use CFDs to actually capture the stock price movement. CFDs are extremely linear instruments, so the entire stock price movement is captured, be it $1, $2, or even $20. And this is achieved at an affordable cost, and at amazingly good liquidity (you can close the trade right at the highest high).Online CFD trading has become extremely efficient in many ways. But looking at stock Option premiums to figure out the intentions and knowledge on the company in question, is a really cool idea all wise CFD traders know about. And it is one of their secret CFD trading tools. Out-of-the money Call Option premiums give away penny stocks that are about to make good moves. While CFDs allow to actually capture the entire move, linearly and in an affordable way, that no other trading instrument can ever offer.