The number of CFD trading systems is endless but what we are going to look at today are the key components of a CFD trading system and what you might like to focus on when you first get started. The mere fact that you are searching for a CFD Trading System is proof enough that you moving to the next stage of becoming a Professional & Successful CFD Trader.
What is a CFD trading system?
When we look to get started and build our own CFD trading system it is important to have the following components built into it.
Entry
Exit (both initial stop and in-profit stops)
Risk management
Whilst most new traders focus 95% of their time on the entry you might be pleased to know that statistically only around 20% of your overall success comes from the ideal entry point. The next component of your CFD trading system is your exit and it's vital to have both an initial stop, sometimes referred to as a protective stop, and an in-profit stop.
The last component of a successful Contracts for Difference (CFD) trading system is risk management and it is here that you will determine how many CFDs to buy and the maximum loss you are willing to take. Now as you can imagine the combinations of entry, exit and risk management are literally endless. The number one trading coach to turn to when it comes to risk management is Dr Van Tharp and his book trade your way to financial freedom is a must-read bestseller.
What to focus on in the beginning
The most critical element to get started with as you begin your journey to CFD trading success is to determine your ideal timeframe. This simply means you must know what period of time you are looking to capture your profits over. In addition to this it includes knowing the available hours that you have to trade.
Another suggestion when you first start out is to trial as many different varieties of trading systems as you possibly can. The reason for this is that we all have different psychological profiles and largely we are all better suited to one style of trading over another. As a result what you may want to do is trial several different trading systems or even dozens of different trading systems and find the one that sticks.
Tiger Woods does it
This strategy would be no different to a professional golfer, like Tiger Woods, trialing several different types of drivers in order to find the one that suits his game perfectly. As they say the definition of insanity is doing the same thing over and over again and expecting a different result. Unfortunately, most new traders either learn from a friend or pay thousands of dollars to learn that one specific style of trading only to discover that that style of trading does not fit their psychological profile or even their ideal timeframe.
So as you can see finding the ideal CFD trading system comes down to identifying your ideal timeframe and trialing dozens of different approaches to profit from the markets.
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