Tips for CFD traders in Singapore

If you are thinking of venturing in the financial markets, you should put as much effort as you would when launching a new business. There are a lot of similarities between trading in the financial markets and running a business. In both cases, the goal is to make a profit and minimize losses.

Most of the individuals who venture into the business world don’t succeed overnight. It takes a lot of effort and dedication to build a successful business venture. To become successful over the long run, you must learn the ropes and establish good habits from the onset. If you are considering to venture in CFD trading in Singapore, here are some tips for you.

1. Look out for reputable CFD providers

Currently, in Singapore, numerous CFD providers promise to offer the best investment vehicles to traders. But if you are thinking about success, you should take your time to choose a reputable CFD provider. The best thing is to look for a CFD provider who offers separate client bank accounts. It is also essential to invest with CFD traders based in SG rather than those found in foreign countries. Again, look for CFD providers who have a wealth of experience in the industry. The most important thing is to ensure that the CFD provider guarantees the safety of your investment.

2. Narrow your scope to a few assets

Most of the traders make the mistake of focusing on multiple assets at a time rather than concentrating on a few assets. If you want to become an expert in CFD trading, focus on a few assets at a time. Most of the successful traders choose to concentrate on a single asset. For instance, they trade in Oil or Gold, or EURUSD. These assets have high liquidity, and there is a lot of information about them on the internet. An asset with high liquidity will enable you to lower the trading cost. On the other hand, the availability of important information about the asset increases the chances of success.

3. Record every detail of your CFD trading

If you ask any successful entrepreneur out there, they know the value of keeping business records. Human beings are forgetful creatures. Our brains tend to keep a record of our wins and quickly forget about the losses. Unfortunately, in business, you can’t succeed if you keep repeating mistakes. It is therefore essential to keep a detailed record of assets that performed well and those that performed poorly in the past. With a comprehensive history, you can easily predict the best days, weeks, or even months to trade in a specific market. Your record should include items such as:

  • The CFD asset
  • The size of the trade
  • The date of the business
  • Outcome (profit or loss)
    1. Create a system

Most of the traders make the wrong decisions while trading because they lack discipline and a proper system. Don’t ever make an investment decision based on your prehistoric instincts such as over-enthusiasm or fear. The best way to overcome such instincts is by developing a system and having the discipline to stick to it.

Don’t make investment decisions based on your past experiences, but instead use the available facts and figures. Having a robust system will help you to make the right decisions and maintain a positive attitude.

5. Focus on minimizing your losses

If you want to make money, you must learn not to lose money. If you are new in CFD trading, there’s a 95 percent probability you might lose your investment within six months. What do the 5 five percent of the investors do differently from the 95 percent? The best way to avoid losing your investment is by limiting your risk.

If you are a beginner, you may consider practicing with a demo account before entering into a CFD contract. Also, you may consider choosing a micro account, placing pilot orders, and a stop loss to shield you from excess losses.