CFD Trading Tips: Learn Winning Techniques from a Real CFD Trader

SYDNEY, May 3, 2012 /PRNewswire/ --

Given the uncertainties gripping global markets these days, CFD traders are re-adjusting their trading techniques to capture favourable market movements.

Gone are the days of the buy-and-hold strategy that paid quite well for some investors in the past; with the opening of global markets to retail traders and investors - plus the availability of technology and online trading platforms - CFD traders now have more flexibility to polish their trading strategy.

But no matter how long or short your trading time frame, there are tested and reliable techniques that you can implement in the current market environment.

In this article, we talked to a real CFD trader about her time-tested winning techniques over the years.

Interview with a Real CFD Trader at City Index Australia

Q. How do you decide on which instrument (e.g. share CFDs, FX pairs or indices) to trade given that there must be thousands of them in the City Index Australia trading platform?

"One of the good things about online trading is the availability of easy to use features for monitoring, opening and closing of trades.

The City Index Australia trading platform is very user-friendly and it allows me to set up watch lists. Couple that with the charting capabilities and I can easily identify trading opportunities."

She goes on to say: "I usually take an aggressive but measured approach in identifying trades. I need a solid confirmation in terms of a strong price move (up or down). I use the charts on the City Index Australia platform to get a visual view of these price movements"

Q. What do you do if a trade goes against you?

"This is where the importance of a stop loss order comes in. A stop loss order is my lifeline in the markets; it is exactly one of the reasons why I trade CFDs.

I have the ability to set my own stop loss level (unlike when I trade shares)."

With City Index Australia, you can have access to different types of orders including stop loss, guaranteed stop loss (which attracts a small fee) stop entry or market orders.

Q. How much do you put into a trade?

"Again, another benefit of trading CFDs is that you only need a small capital to get into a trade. You don't need to shell out a big amount of trading capital right up front.

In turn, this helps me manage my trading capital more efficiently."

She adds that during her early years as a trader she was 'very conscious of keeping it small'.

"I still use only a certain percentage of my capital to a given trade because I believe in protecting my capital and limiting my risk to a minimum."

"I believe that the bigger the position is the more difficult it is to get out, so I only allocate a portion of my capital to spread them out in different trades."

Adding: "Over the years I've used these simple but time-tested techniques that deliver good results for me. I believe in knowing your trading platform inside out because that's the only way you can optimise the features to my advantage.

I find the City Index Australia trading platform easy enough to use with all the features that I need to implement all these techniques efficiently."

About City IndexAustralia:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

City Index is a leading global provider of margined foreign exchange and CFD trading. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.au/