Trading Online CFD Concepts and Ideas

New trading online CFD ideas are found in many curious traders’ journals. Some of these traders take experimentation to extreme levels. In order to reduce risk.

Trading Online CFD Powerful Concepts

Trading online CFD concepts range from simple day trading forex strategies to advanced hedging and dynamic hedging strategies. All implemented in order to somehow reduce exposure to risk, while keeping exposure to profit at appropriate levels. The wise CFD trader trades at multiple speeds, as the circumstances require each and every time. Dynamic hedging is all about varying the size of the hedging trade, depending on what the market is doing. The simplest method of such dynamic hedging is based on the idea of using LSS daily and weekly pivots. So if market price moves beyond one pivot level, small hedging size is used. And if price move even further in the undesired direction, beyond a secondary pivot, much larger hedging is used. LSS pivots define possible price reaction levels, and hint possible breakouts and market momentum. Traders who know what is CFD trading and the benefits it has, do use CFD in these strategies. CFD are linear and straightforward to trade, thereby enabling both the intended trade and the hedging trade to follow market price closely. And accurate pricing is the only way to make a strategy as this one, yield the expected results. Futures for example cannot be used for accurate hedging, because their pricing includes factors such as risk, and expected events. And can deviate dramatically from spot market price. It’s no wonder that many Futures and even Option traders use CFDs to hedge losing trades, or even recover losses on previously naked trades. The opposite is not easy to do, you cannot use Futures to accurately hedge any investment, especially short term ones. And using Options is possible, but their complexity makes it much easier for things to go wrong, than right. The slightest oversight in Option pricing parameters can turn a profitable trade into a ridiculously small profitable trade, or even into a loser. CFDs are simple and straightforward, but traders still have two variable to experiment with, and these are trade size, and LSS pivot levels.

Trading Online CFD Ideas for Forex News Traders

Forex news traders have developed some trading online CFD ideas, for using around news release times. The global forex currency converter trading platform makes it possible to trade the news in terms of volatility and breakouts. In simple words, traders cannot predict how the market will move after volatility dies down, following a news or economic report. But they know that the daily trend is unlikely to change. They also know the weekly and daily LSS pivots. So through critical thinking and logic they expect that market price will become very volatile right after the news or report release. And this volatility will make price sweep up and down, so as to cover all possible pricing scenarios. From worst to best. By figuring out this trading range, they plan their day trades accordingly on such days. Trading efficiency and liquidity are assured through CFD trading. And the only variables they will change are entry and exit points, and of course trading size. Stops can be very large, and outside the expected daily trading range. Even if that range is found to be 400 pips wide, they are willing to hold a 400 pip losing trade until volatility dies down. Tight stops won’t work. Such large range trades can be of smaller size, so as to reduce risk, and to make it easier to hedge them if necessary. But that’s the way it is, only these bold day traders make serious money in the forex market. You simply need to bear in mind, that a single day’s events cannot change the daily trend, not unless big and obvious conditions are in place. No matter what the news or report story is. And that market price will attempt to intimidate you into surrendering your open losing trades. Traders lacking this critical thinking use small stops, or panic in the volatility. They will close that losing trade at -150 pips, and as soon as they do that the market goes 300 pips the other way. Successful day trading online CFD ideas are based on such critical thinking, requiring to do things that defy belief. And they are extremely profitable, their success defies belief too.