CFD trading has never been as hot as it is right now and as the industry continues to evolve the benefits of trading are increasing. In fact, it’s never been a better time to get started with CFD trading than now.
That being said, it can be a daunting world to enter, and you definitely need to have some background information before you get started.
Therefore, we asked for the head of content at BullMarketz.com to set up a basic guide on how to start trading CFDs.
Pick a Market
The beauty with CFD trading is that it gives you direct availability to a range of markets and even though many professional day traders trade on several markets at the same time, we suggest you get started with one.
Do you feel like trading stocks? No problem, most CFD brokers have an extensive list of available stocks you can trade. Are you knowledgeable about commodities, both spots and futures? Perfect, there are CFD brokers for that too. Same goes for forex trading, options, indices, bonds, ETFs, we think you get the picture.
Furthermore, cryptocurrencies have made their way into the world of CFDs, and today most brokers offer cryptocurrency CFD trading, which can be risky due to price volatility. Some even provide the option of buying the actual digital currencies and not only as derivatives.
After you’ve decided on which markets you’re going to focus on, it’s time to find yourself a broker.
Find a Regulated Broker
You should always use a regulated broker for the simple reason that most unregulated brokers are scams. By choosing a regulated broker, you ensure that your funds and your information are kept safe, and if anything would happen, you will have the support of a regulatory agency.
Now, instead of you searching high and low for the best broker we can help you out.
If you’re new to CFD trading, we recommend you open an account with eToro. This broker is different from all other brokers because they’ve decided to offer a different way of trading. Instead of analyzing the market and finding opportunities on your own, you get to copy other traders. For a more extensive walkthrough of eToro read this comprehensive review.
The platform is easy to use, and your goal is to find a successful trader that you want to copy, after that everything is automatic and you decide when you want to stop. This means you can benefit from professional investment strategies and make a decent profit even as a beginner. eToro also focuses on stock trading, forex trading, and cryptocurrencies which happen to be the three most popular markets right now.
If that’s not enough, you can also use the biggest social trading network in the world to learn from and be inspired by other traders.
Learn Some Basic Knowledge
Even though eToro can be used to copy other traders, it’s advisable that you learn a bit about trading before you get started. Without a basic understanding of financial systems and derivatives trading, you won’t make it far.
Study charts, terminology, price movements, investments techniques, and strategies. Read trading books, watch videos, listen to podcasts, and anything else you can think of. Remember, the more knowledge you have, the better your chances of succeeding as a day trader will be.
A great way to practice trading and gain experience is by opening a demo account. A CFD demo account with eToro or any other broker is completely risk-free, and it allows you to trade under real market conditions without depositing your own money.
Demo accounts are also great tools to use for optimizing strategies further down the road.
Take Your Time
Our last tip applies to any type of trading whether you’re getting started with a stock portfolio or looking to trade CFDs.
Take it easy in the beginning and don’t invest too much at once until you get the hang of it. If you’re serious about making CFD trading a part of your life, you will have to perfect your skills, and it’s unnecessary to waste money in the beginning. That being said, you still want to invest enough for it to be exciting.
Also, don’t be discouraged if you lose money on a few trades – we all do, it’s a part of the game.
