Trading strategies are not only suited to a trader's trading purpose, but also to each trader's personal approach, goals and personality。

Trading strategy is a key element before successfully navigating the market。Factors to consider include entry point, time frame, funding and risk management, stop loss, and exit point。This article explores CFD trading strategies based on expert advice.。

Entry point

Choosing the right entry point to establish a CFD trading position can only be achieved through trial and error.。Obviously, there are advantages to using moving averages, chart patterns, technical analysis and many other methods, but ultimately only by putting these into practice can traders find their footing and know how to best apply knowledge to their trades。

Since the different permutations and options available are essentially unlimited, many believe that a reliable entry point is the key to success。However, a good starting point cannot guarantee a good result without the help of other elements。

Time frame

CFDs are often used by short-term investors seeking fast-moving markets and quick turnaround of assets。This "day trading" approach sometimes actually means trading every minute, so traditional "buy-and-hold" investors will likely not be attracted to the sector in the first place.。

Today, everyone has access to real-time (RT) data, whereas in the past, only floor traders and professional brokers could see the information they needed to make quick decisions。Day traders usually close all trades at the end of the day, using small gains to gradually accumulate profits。However, because of its flexibility, CFDs can be used for long-term trading, sometimes simply holding winning positions, or not often holding positions designed to be held for weeks or months.。The key factor for success is to understand how long the time frame is suitable for each trading position, and use appropriate methods to choose the right exit time。

Funding and risk management

In any trading area, the funds available and the risk profile of the investor need to be clearly specified before any action is taken。Since CFDs are a leveraged product, they can be arranged without full capital, but again, this means that the risk of loss may also be higher。

For multiple trades at the same time, the overall risk of all positions must be considered, while for a single trade, the possibility of problems must always be taken into account。Fortunately, CFDs have built-in tools that can make funding and risk management easier, and even automate most of the complex work in many cases。

Stop Loss

Stop loss is a tool for CFD trading that allows a trader to choose a level and if it falls below a certain level, the trade will automatically close the position。Knowing where to set stops can only be learned through experience, but it can be helpful to develop a trading strategy that includes a clear funding and risk management basis from the outset。

This is also where so-called "emotionless trading" comes into play, as there is always a danger of not placing a stop order so that the trade can run a little longer and see if it "turns around."。This can lead to very dangerous trading conditions, especially for leveraged products such as CFDs。

Point of appearance

Closing a trade means making a profit or keeping losses at an acceptable level。Technical tools and chart patterns, support and resistance levels, and other methods can again be used to predict the best results。However, having goals and objectives can also play an important role in successfully selecting an exit point, as determining that a certain level of profit is sufficient may be a good way to move forward。

What is a good strategy？

Developing a strategy is important, but that doesn't mean it's a good strategy, and even a good strategy may not be the best strategy for any particular individual。Personality plays a very important role in choosing which approach to take to any form of trading in the market, which may be even more so for CFDs。

With such a flexible tool that can be used in many different ways in the pan-market and underlying assets, there will be a large number of trading strategies suitable for any particular situation。The real trick lies in figuring out what works best for each trader's unique goals and considerations。