Contributed Content
Before you learn the ways to control risks in CFD market, do you think it is possible to "control" risks? Well, it is possible. You cannot avoid risks but you can control risks. As traders, you must learn the ways to control risks if not you cannot move further in your trading journey. If you look at the CFD market, it is not as complicated as other markets. For example, if you try to trade the market without any trading strategies or techniques, would you be able to trade successfully? Obviously, you would be struggling. Likewise, you shouldn’t enter the market without learning the ways to control the risks. If you enter the market without learning the ways to control risks, you will also leave the market just like the amateur traders. If you want to become like the traders in the expert trading community, you should look at the way they perform trading. You should find their success stories and learn more about becoming a successful trader. Well, the Forex market isn’t a play. If you want to become a part of the market, you should show your real dedication towards trading. Without dedication and passion, trading the CFD market would be just a dream. If you want to achieve real success, you should train yourself to behave like a successful trader.
Basic rule of money management
Those who are completely new to the trading profession should never risk more than 1% of their account capital. You might start with huge investment but losing money in Forex market is just a matter of time. So if you risk 1% equity in each trade, it will be very hard for you to blow your account. Always keep your emotions in check since it is the easiest way to save your investment in this profession.
Learn to use the margin in a practical manner
You should know about CFDs before you enter the CFD market. If you do not know what CFDs are, it is much better to take some time and learn it. Most traders enter the market without knowing what trading CFDs mean so they quit trading in a short time. If you don’t want to face the exact situation, learn CFDs. Anyway, the trade positions should be handled sensibly. Do you know why? So that it wouldn’t affect your future trading journey. So, when you are using margins you should be really sensible not to ruin the entire trading journey. You should think about the future trading, so double check whether there is enough fund left in your trading account. If you have enough fund, in case, if there any losses it could be covered so the trading position could be saved. Just assume if you don’t have the required fund, what will happen? It is when you will receive the margin call. This is a nightmare in a trader’s life. So try to avoid this as much as possible.
Practice to make use of Stop Loss
This is a great chance for a trader. When a trader enters a trade he should bear in mind that stop-loss order will become their rescuer. It helps to limit losses, in case, the market moves in a different way than you anticipated. The trade will be closed if it turns out as a losing trade, so you should practice using the stop loss.
Know to use the hedging tool wisely
You can profit even from a falling market, which is why CFDs are popular. Anyway, you can use it as a hedging tool so that it will offset the losses. But using the hedging tool wisely is really important. You can protect your position in the trading world if you know to use the hedging tool in the right manner. If you have less knowledge on this, try to learn more about it.
