subject: Creating A Stock Trading Plan - Create Your CFD Trading Strategy And Stick To It [print this page] Creating A Stock Trading Plan Creating A Stock Trading Plan
Now that you are involved in CFD trading, you have learned the ropes a bit and want to begin on your path to success. Hopefully you have studied trends and charting, if so then it is time to plan your strategy and creating your own Contracts for Difference trading plan.
The first step in developing your plan of action or trading plan is to decide what time frame you plan to monitor your trades as well as plan out how long you wish to stay in each trade. Generally most investors are not able to monitor their trades round the clock; the most common part of the day is at the close. CFD traders normally use a time frame of from a few days to a few months to stay within the trade. This of course will depend on what you are invested in. Once you are sure you have this set, you should move onto the next section. Creating A Stock Trading Plan
Selecting your CFDs will be the next step. If you are still new to this, it is best to be very selective in what you are delving into. It is best in the beginning to trade CFDs which are currently in the uptrend. In general these should continue to perform well. If you have not, take the time to study a few step-ups, what this means is that by studying patterns from past top performing stocks, you can chart when the step-up was. Doing this often helps you gain confidence in your decision making.
Determining when you should enter and exit your CFDs position is the next technique you will want to work out. Entering the trade you would want to have set conditions, and to follow upwards trends once again. Remember also that when you first enter into the contracts for difference trade it will show a loss ((according to the CFDs broker fees). This loss will be equal to the spread. Take that into account when you set your initial stop. This will protect your capital. When your stop is approaching and you feel you want to stay within the position, you should be able to change the stop. Remember, at times a stop may take a bit of time to actually go into effect.
In conclusion, you should be sure to write out your strategy on paper. Write down each step and fill it in with your plans. Try very hard to follow it as this may prevent failure. You can always adjust it, or refine it as you trade your way in the Contracts for Difference sector. Creating A Stock Trading Plan
Creating A Stock Trading Plan - Create Your CFD Trading Strategy And Stick To It
