Do you associate CFD trading with gambling? If yes, you certainly need to read this page! The truth is that you can make moves like a gambler, which is entirely your choice. However, calling this trade a gamble would be hyperbole.
If you trade at seven to ten times or more than your actual account size, then it is an absolute gamble! For example, if your account size is $10,000 and you trade at $70,000 or $1,00,000, you have leveraged excessively high and have played a risky game. However, if your account size is $10,000 and you trade at $12,000 or maybe up to $15,000, it can be said that you traded within your means and at less risk. It can be labeled as an intelligent and calculated move, rather than a gamble.
The trick to playing the CFD game is to begin small and move your way upwards gradually. Gamblers, beware!
Are You Trading In Positive Expectancy?
Positive expectancy in CFD trading means that you expect to get back the dollar that you have put at stake in trading, and expect to earn more.
For gamblers, they should understand that casinos play this positive expectancy game. It's smart, isn't it? You are the gambler, but the casinos that provide a platform for gambling are hardly gamblers. They have put their money with the assurance that they would get it back and more. They are calculated risk-takers.
In trading in CFDs, you need to have this positive expectancy to get rid of the "gambling touch". Perhaps, this is one of the qualities that separate CFD trading from gambling.
In the long run, as a CFD trader, you must be able to create several such expectancy systems. This will allow you to trade in various markets in various time frames. Once you are able to achieve this, you can expect long-term gain from this trade.
Do You Have A Trading Strategy?
If not, you certainly are gambling, but don't expect to survive long here. You need to have a definite trading plan or strategy to make the right moves in the market. This requires putting in efforts to understand the market trends, taking guidance from experts in this trade, and having a willingness to stay in the trade for long.
Just like any business, CFD trading, too, requires a well-formulated plan and clear objectives. It certainly is business; you are here to make money, right? Your plan must include strategies for entering the trade, exiting it, how to manage risks, and how to tackle unforeseen turn of events in the trade. You cannot simply put money on this trade and watch what happens...this is gambling. It is also one of the worst ways to trade.
If you are here only to try your luck and become a "one-time wonder", you better gamble!
Contracts for Difference is a game for the organized investors who have better control over their risk-taking urges. They are here to put in money to earn more money. They are not here to throw away their money and then wish for lady luck to smile at them. CFD trading is NOT gambling!
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