SYDNEY, Australia, April 24, 2012 /PRNewswire/ --
With thousands of trading instruments to choose from - including share CFDs, currencies (FX), commodities and indices -deciding on which trade to make could be daunting for some.
Investors choosing to trade CFDs with City Index have used simple and easy to implement trade selection strategies to identify high-probability trades.
Remember that the real objective in CFD trading is to make money, not to have the most complicated trade selection process.
Develop a Trading Plan
Your trading plan could be as simple as setting your entry and exit levels for any trade. Just as you know at what price you will enter a trade, you should also set a definite price on when to exit. This should apply to whether it will be a winning or a losing trade.
Setting a specific entry and exit level will eliminate the emotion in your trading. The City Index trading platform offers various types of trading orders including limit orders, stop in orders and stop loss orders.
You should familiarise yourself with these order types and use them accordingly to stick to your trading plan.
Keep your trade selection process simple
A well-known author and trading coach once said "trading is simple, but it is not easy." Of course he was referring to simple strategies that could be implemented when trading. It gets complicated when you introduce a trader's individual psychology, trading goals and personality type.
If you are a technical analysis type of trader, you may want to choose two or three indicators as the basics for your trade selection process. While most online trading platforms now feature charting capabilities, you should not get bogged down by them all. Use only a few tried and tested indicators such as moving average, volume and average true range to see the overall trend of the instrument you want to trade.
If you are a fundamental analysis type of trader, you also need to consider only a handful of factors. Remember the idea is to keep it simple. Through City Index, you can access a range of CFD markets; for example, if you wanted to trade share CFDs, it is advisable to know the price movement pattern of the underlying share.
Whether you're looking for capital growth or dividend payment, you should focus on using simple selection techniques.
Go for strong performers
One of the advantages of trading derivatives - such as share CFDs, FX, indices and commodities - is that you can go short or long.
That means you can trade (and potentially make money) whether the markets are going up or down.
It's been said that markets can only go up or down. However, markets could also go sideways at times.
Whether you want to trade short (sell high, buy low) or trade long (buy low, sell high) you should go for instruments that are showing strong moves on the direction of the market you want to trade.
Why trade with City Index Australia
Given the huge number of trading instruments available to retail traders now, you need not limit yourself to trading Australian shares.
Global markets that were once only accessible to institutional traders are now open to retail and individual investors.
Trading CFDs with City Index will allow you to access Australian, Asian, US, European and UK markets using a single platform.
While the idea is to keep your trading strategy simple, you need not limit yourself to the Australian market. There is a whole world of trading available to you.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
City Index is a leading global provider of margined foreign exchange and CFD trading. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.au/
SOURCE City Index Australia