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5 cardinal rules of trading the CFD market










CFD trading has become very popular in today's world.
Due to the accessibility of different instruments, people are shifting from the currency pairs to the CFD market.
The market is a trending one and that gives retail traders a decent opportunity to ride the trend.
Sadly, the rookies don't love to trade the trending asset.
They sell the top and buy the bottom when the asset exhibits sideways movement.
In most cases, they make some good trades but lose all the profit after a major breakout.
So, choosing a sideways market is not the ideal approach to trading.
Let's find out some of the essential rules you have to use to trade the CFD market.
If you are good at analyzing the data, just by following these few simple rules, you can become a top CFD trader in Singapore.

1. Spot vs. Future
You have to know whether you are trading the spot market or the future.
If you trade the spot market, you have to be prepared to learn about the current market dynamics.
But those who are dealing with the future market should know about future contracts, OPEC decisions, etc.
Things are not as critical as they seem.
Traders always find a way to complicate the trading process.

2. Technical analysis skill
You must be very good at
Choosing minor levels is not going to work.
The professional CFD traders always use the major levels because they know minor levels are not going to offer trend trading opportunities.
You can trail the stop loss using the minor levels but it should not be used to find the entry point.
To find the major levels, choose the daily or the weekly chart.
Stop focusing on the minute and hourly chart.
It's not like trading the major or minor currency pairs as you won't be focusing on high-frequency trades, it is important you learn the proper way to find good setups.

3. Fundamental skills
News analysis is essential for CFD traders.
Without knowing the performance of the leading economic countries, it will be a tough task to know about the price movement of major commodities like oil, gold, silver, etc.
So, do you think learning about the fundamental details is going to be a tough task?
The obvious answer is no.
Professional like SaxoTraderPro have a premium alerts for major news.
Just by looking at the headline news, you can prepare yourself for the potential volatility.

4. Stop taking a high risk
CFD trading is much safer, but you will still lose money.
So, taking a high risk and trying to secure your capital is not going to work.
You and think about the conservative trading technique.
Taking too much risk is the action of a new trader.
The maximum risk you should take in any trade is 2%.
However, you can make an exception when you are analyzing the weekly or monthly charts.
In that case, you can take a 3-4% risk per trade.

5. Trading with emotions
Last but not least, you must have strong control over emotions.
Taking the trades with emotional steps is going to make you a weak trader.
You will become overconfident after winning a good trade.
This will push you to trade with high risk.
On the other hand, after losing a trade, you will not be able to analyze the market properly.
Many good signals will be ignored.
The development of your mental stability is critical to your success.
Work on your psychological development to ensure the safety of your career.
At times, you might find it hard to control your emotions.
It often happens to the professional traders.
Take a short break and take your time.
This will help to get back on track.
Don't take a trade with an unstable mindset.




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