Getting yourself involved in the CFD market is an easy task. You can open a trading account with a good broker within a week. By using a premium level broker, you can become a real trader with the ability to buy and sell the asset in the real market. But getting the buying and selling power is not enough. You have to go beyond this level and learn new techniques you can use to make money and make progress.
A major portion of CFD traders are losing money. However, by taking a close look at the Singaporean traders’ community you can surely see a good number of traders are making a decent amount of money by taking trades in the CFD market. To be a better trader, you need to know why people are losing money. Let’s discover the key reason why.
Fear of missing out
Novice traders always trade with high risk because they suffer from the syndrome FOMO. FOMO means the fear of missing out. If you suffer from FOMO, you probably don’t have enough technical skills. Due to a lack of skills and technical knowledge, traders always put themselves in a bad position. This eventually causes them to lose money most of the time. They only way you can overcome this problem is by following the standard rules of trade management technique. This means you should be expecting some losing trades from any order you execute.
Having high expectations from the market
Those who are involved in the CFD market for more than 1 year, know that having high expectations is very bad for trading. Ask the professional investors at Saxo capital markets Singapore. They will always tell you not to trade with the money you can’t afford to lose. If you trade with your savings or borrowed money, you are bound to lose money most of the time. The human mind can’t operate well when it is are under great stress. To eliminate the stress of trading, you have to get rid of any high expectations you might have. Expecting losing trades from each order makes you a stronger trader and improves your adaptability.
How many trades do you execute per day? Very few people will say that they execute 1 or zero trade per day. On the contrary, most people will say they are taking 5-10 trades per day on average. The number of trade is so high because they depend on the high-frequency trade execution method. Taking trades with the high-frequency trade execution method is not going to work in real life. You have to set the expectations low and this will give you the chance to earn more money. For that, you need to find a good trade. That requires patience. Start to develop strong patience as a low patience level forces a trader to lose money.
Executing trades during the news
You should never execute any trade during the major news release. If you execute the trade during the major news release, you should be losing money. The spread becomes very wide and it becomes really hard for the scalpers to cover up the spread gap. The institutional traders take trade after the market takes the heat of the news. The heat can create a bumpy price movement and it can easily hunt down the stops. These are the time when the novice traders lose a major portion of the capital. So, try not to take any trade during the news.
Surviving in the CFD trading industry should be your priority. If you want to take high risks and secure your financial freedom, trading is not the right job for you. You have to go slowly and focus on steady equity curve. Taking a high risk in each trade and trying to earn a significant amount of money can put your career at great risk. So, learn to take trade in a conservative way.