19. May 2011 14:23
1. Which markets will you focus on?
There are so many markets to choose from these days which you can access at your fingertips thanks to technology. I would always recommend sticking to markets you know, markets you’re involved in everyday so you have a better understanding of what’s going on day to day. It also means you will usually be trading a market during your business hours not sitting at your computer at 3am.
2. What times do you want to trade?
We discussed previously peoples daily schedule whether it be a 9-5 job or having to drop the kids off at school. Therefore makes sure you have an allotted time each day that you are willing to simply focus on your trading. You owe it to your trading or there is a great chance you will fail.
3. What instruments will I trade?
Again many CFD providers will give access to a multitude of products ranging from FX, Indices, Equity and Commodity CFDs. All with great potential for profits and leverage. Keep in mind liquidity, leverage, trading costs, volatility and trading hours will vary amongst all these instruments so make sure you select on that best suits your strategy and the time you have allowed for trading. A lot of these products will be covered in depth in later CFD tutorials.
4. How will I execute these trades?
Make sure you have a good reliable platform. A platform can make or break a trading strategy. If you are unable to trade during market hours or watch the screen all day make sure the platform you use has all the automated trading functionality required to execute trading strategies while you are not present at the computer. Technology these days allow us to get in an out of trades at specific points without even looking at the screen when they occur. Make use of this that’s what it is there for.
5. What software or data will I need to execute my trading strategy?
You should treat your trading as a business. Like with any business you need to invest in the tools of your trade. For traders this is having the right software to help validate trades and turn trades into educated decisions rather than guess work. To many trades try to scrimp out on these additional costs but keep in mind this will be the difference between profitable and un profitable trading. As an example I use Stock Doctor for my fundamental analysis and Metastock for my Technical analysis like market scans for setups etc..