7 Best CFD Trading Tips to Trade Like a Pro

Interested in CFD trading? Avoid common mistakes by learning the best strategies. Discover our seven best CFD trading tips so you can trade with confidence.

While only 10% of Americans own 84% of stocks, there are lots of other ways to get involved with trading other than owning stocks. Forex, cryptocurrency, and CFD trading are just a few ways to seek out wealth other than the standard buying and selling of stocks. A contract for difference is a particular agreement that allows you to speculate on prices of assets over a period of time.

Here are five tips to ensure that you succeed with your next major CFD trade.

1. Be Patient

It’s vital for anyone who is learning something new to be patient with the learning process. Whether you’re learning to rollerskate or trade CFD, you’re going to stumble if you don’t learn the basics first.

When trading, you need to start by understanding everything you can about how foreign currency works. Get to know the playing field and move slowly at first.

Invest only small amounts of money for the first few months or even years if you don’t have time to invest in learning. Slow and steady investments will give you an understanding of how currency trading works, the kind of change that happens in markets, and where you fit in.

Markets spike and drop in extreme fashions but by and large, they tend to change fairly slow.

2. Adjust Your Expectations

When you’re CFD trading, don’t expect to win big on every trade. No one succeeds at everything on their first try, so why should trading be any different?

You need to practice trading before you can get the results that you’re looking for. Constant trading gives you the opportunity to win and lose. A few wins and a few losses will teach you more than any article you could read.

Losing money when you’re learning is an unappealing prospect to anyone. That’s why many of the biggest trading tools out there allow you to set up a demo account to play around with for a while. There are no consequences with a demo account and it costs you nothing to set up.

Learn more about trading tools by playing around with a variety of options. Sign up for a few free trials and see what works.

3. Become an Armchair Psychologist

While you might not think of yourself as a psychologist, the key to trading is to understand how the human mind works. CFD trading means that you’re going to be speculating on the rise and fall of markets. You need to think about what happens when a market changes and start to consider how people react when they see a market drop.

You also need to be skeptical of your own thinking.

There are times when you’re looking for a problem and merely get the confirmation bias that you were looking for when pieces come together. If you weren’t looking at facts and were thinking with your gut, it’s easy to have your fears or beliefs confirmed.

Some traders are liable to make a trade out of frustration when they feel like they’re going to get burned. This kind of acting out can lead to mistakes or losses. Even when it doesn’t, it reaffirms bad habits.

Always think before you act. Get to an understanding of why you chose any particular currency pair. Was it based on something in the news, an international development, or merely your gut?

Getting to the bottom of your psyche is key to making the best decisions.

4. Control Your Emotions

Related to the last point, you need to keep your emotions in check when making a trade. A losing streak drives you into depression and causes you to think that you’re not capable of making good judgments. You’re likely to act up and make trades that don’t make sense when you’re in this stat.

Level-headedness is your best friend when you’re dealing with a losing streak. Making smart choices means keeping control over how a trade makes you feel. Manage risk by managing your feelings.

It’s easy to get stressed out when you’re trading. There is a lot of quick decisionmaking that goes into CFD trading. When you see something drop, quick actions leads to high yields.

However, if you’re in a state where you’re about to make an irrational or stressed out decision, take a deep breath. Don’t cost yourself money because you made a stressful trade.

Figure out what’s stressing you out and get on top of it. Find a treatment for stress when trades don’t go your way. Some people go run a couple of miles while others go get a cup of coffee and think about their choices.

No matter what you need to do, be good to yourself and focus on how fruitful trading can be rather than how stressful it is at moments.

5. No Rewards Come Without Risks

Remember what you’re really doing. With CFD trading, you’re doing a lot of risky speculation. The reason you get into it is because of how rewarding those risks are.

In CFD trading, fortune favors the bold in the most literal sense. You need to be able to anticipate which way the market is going to go in the future. Your success depends on it.

Your trades won’t work 100% of the time but if you don’t make them carefully, you’ll end up disappointed at the results. CFD trades reward people who like to research, read up on markets, and pay attention to which direction the wind is blowing.

Set realistic goals and work to exceed them with every trade that you make. The best way to control your feelings when trading is to make sure your personal finances are in order.

CFD Trading is a Fun Challenge

If you’re not that excited about traditional stock exchanging, CFD trading offers serious excitement. It can give you a new way to look at the price of assets over time.

For another exciting way to build wealth, check out our guide on buying, selling, and trading cryptocurrency.

3 Methods for Successful Swing Trading

Swing trading is a valid method of trading stocks and making a profit, but it requires good money management, a willingness to put in the research, and the ability to accept the fact that you’re not always going to make a large profit on a trade. Understanding swing trading is easy, but executing your trades so you earn money takes study and research. Below are three methods to help you become a successful swing trader.

Manage Your Money

There’s an old saying that investing in the stock market is a lot like gambling, and there is an element of truth to this. However, you can control your money by engaging in smart money management. Keep track of your starting balance, work out an estimate of profit based on the past performance of the stock you plan to invest in, and don’t hold onto the stock once it has reached your planned profit.

A stock can keep increasing in value, but it can also decrease suddenly, leaving you with a loss. Losses are going to happen, and it’s never an easy thing to accept, but an occasional loss can be overcome by many profits. Plus, some losses can also be avoided by sticking to your plan and not pushing your luck.

Study Past Performance 

Stocks have a historic performance record that’s a good indicator of how they’ll perform in the future. There are no guarantees that the stock is going to keep performing as it has, but barring bad news from the company, you can reasonably assume that a stock will tend to perform within historic parameters going forward. By studying the historic performance, you can uncover patterns that tell you how to handle the stock for swing trading.

Don’t overlook the company behind the stock when you’re looking at what you should swing trade. The performance of a company is what drives the performance of the stock. Corporate ethos and operating procedures have a far greater influence than you might realize. Some people buy stock in corporations because they have a way of doing business that is unconventional yet successful over the long term. Alternately, they may buy stock because the company adheres to old-school operating principles that see a steady rate of return over time.

Don’t Seek Large Profits

Earning money on swing trading is more about making multiple small gains than a single large gain. Before you buy a stock, you have to figure out what your acceptable profit is for that trade. You also need to factor in the fees that come with executing a trade, then subtract that amount from your acceptable profit. You might be able to realize a profit that goes past your estimation, or you might not. It’s easier to expect multiple small profits over time as opposed to one large one and have a pleasant surprise in a large profit now and again.

These methods are part of what it takes to become a successful swing trader; don’t rush the trades, take the time to study the companies, and watch your money inflows and outflows. Slow but steady wins the race when it comes to short-term trading.

How to Trade Stocks for a Living

Learning how to trade stocks for a living takes research, practice, and capital. Most people who decide to go this route are interested in becoming day traders, those who buy and sell securities within the same day. While day trading is different from traditional investing, it follows the same basic principle — buy low and sell high. The difference is that day traders buy and sell in a much shorter time period than long-term investors.

Research How the Stock Market Works

Potential day traders should begin by researching the market and learning how it works. You don’t need to become an expert, but learning basic market fundamentals is vital.

Essentially, the stock market is a huge collection of people buying and selling stocks, pushing the prices up and down. Everyone in the market shares a common goal — they want to make money by purchasing the stocks of companies they expect to do well. While this is a simplistic explanation, understanding this basic premise gives you a solid foundation to build upon.

Learn the Common Terms

Learn the terms used by day traders. Once you have this basic knowledge, your confidence will grow.

  • Securities: Financial assets that have value and are traded
  • Trade: Buying and selling financial assets in the stock market
  • Initial public offering (IPO): The first sale of a corporation’s stock
  • Broker: The intermediary who facilitates trades between buyers and sellers

These four terms are just a few examples, but understanding their meanings will give you a good start.

Best Practices

When you’re researching how to make money from trading stocks, don’t try to learn everything at once. Instead, find a strategy that works and repeat it over and over. Your strategy needs to include a way to enter the market, set up a stop loss, and take profits. Once you’ve determined a strategy, open a demo account, an account funded with fake money, and experiment. Don’t risk real money until you’ve practiced. This doesn’t have to take long.  Many people feel comfortable getting started after practicing for a week or two.

Create Investment Accounts

Once you’ve gained an understanding of how the market works, learned the terms involved, developed a strategy, and practiced, it’s time to open your investment accounts. Numerous brokerage firms facilitate day trading, and you’ll need to pick the one you’re most comfortable with. Keep in mind that by law, day traders in the United States must maintain a balance of $25,000 in their trading account. Due to this, many traders aim to maintain a balance of $30,000 to create a buffer.

Understand Tax Implications

The tax implications associated with day trading aren’t simple, but they’re not as complex as many people assume. The main point traders should understand is that they’ll have to pay short-term capital gain taxes on income generated from day trading. However, hiring a professional tax preparer who understands the nuances of tax law can save you money in the long run.

Trading for a living is a realistic goal, but it takes time and patience to achieve. Potential traders need to learn how the market works, some common terms, and the tax implications surrounding day trading. Once they’ve gained knowledge and confidence, it’s time to open an account and get started.

Cryptocurrency for Beginners: A Guide to Understanding the Most Basic Ideas

If you know next to nothing about the craze that is cryptocurrency, you’ve come to the right place. Here’s the most basic guide on cryptocurrency for beginners.

If you’re curious about cryptocurrency for beginners, we’ve got you covered!

It can seem like a strange new world, riddled with risk to the uninitiated. But it’s also filled with opportunity – and that’s what’s got so many people intrigued.

What is Cryptocurrency Exactly?

Cryptocurrency is a digital currency. It’s an alternative to paper currencies such as the pound, the dollar, the yen and so on. It’s also known as a virtual currency.

Although it’s a virtual currency, it can be used just like a real currency to buy goods and services. Companies such as WordPress, Microsoft, and Shopify accept payment via bitcoin.

Digital currencies are underpinned by something called a blockchain. A blockchain is the backbone technology of the currency. It allows digital information to be distributed but not copied.

Using blockchain technology means that there is no need for a third party (ie a bank) to be involved in a transaction. This cuts fees for people using the cryptocurrency, but it also opens up questions about tracking fraud and even spotting terrorism and money laundering. Banks and financial institutions play a vital role in these issues nationally and internationally.

Cryptocurrencies are globally traded, and when volatile times hit real currencies, many people put their money into cryptocurrencies instead. For example, Bitcoin’s value rose over $100 in a day after the UK’s Brexit vote in 2016. Similarly when Cyprus’s economy crashed in 2013, people turned to Bitcoin rather than the volatile national currency.

How to Get Into Cryptocurrency for Beginners

If you want to understand how to get started with cryptocurrency, or get an introduccion a bitcoin, you’ll first need a wallet. This is a virtual wallet where you save the unique codes and passcode information of your cryptocurrency. You can buy these online, and then you can buy your bitcoins or other currency.

Not all banks allow you to purchase cryptocurrency with their debit or credit cards, so check that first. Paypal is another option to pay for your cryptocurrency investment.

If you wanted to experiment, bear in mind that you could lose your investment. It is a volatile market. If you’re looking at this because you’re interested in increasing your income, you might want to check out these alternative ways to make money online.

If You’re Wondering Which Cryptocurrency to Invest In

There are over 1400 cryptocurrencies available. Your choice will depend on your openness to risk. More established cryptocurrencies such as Bitcoin or Ethereum are probably more stable (but buyer beware, as always).

That said, there is still a lot of doubt and negativity around cryptocurrencies. Citigroup, Bank of America and others do not permit their credit cards to be used for cryptocurrency purchases. Respected leaders such as JP Morgan’s CEO, Jamie Dimon, have even called cryptocurrencies a scam.

It is a new industry, and is still evolving – so the risks and the opportunities are great. If you invest, you’d be wise to only invest what you don’t mind losing if it fails.

Other Money Resources For You

If you’re interested in cryptocurrency for beginners, you might also be interested to read our article on saving money by going cashless.

 

Starbucks vs McDonalds: Which Should You Invest In?

Read more to take a closer look at the world’s 2 biggest franchises, Starbucks vs McDonald’s, and decide for yourself which is the better investing opportunity!

One boasts of billions served. The other sometimes has separate stores so close together they occupy the same block. Clearly, Starbucks and McDonald’s are both successful, but which one is the better investment?

The answer is more complicated than you might think. But we’ve analyzed the data, and we now present to you our guide to investing in two of the biggest fast-food stocks on the market.

If you want to forego commodities trading to invest in stocks, read our analysis for yourself below.

Efforts to Evolve

To begin our evaluation of which of these behemoths is worthy of your investment dollar, we wanted to look at what these businesses are doing to bring their food and their business models into the 21st century.

McDonald’s

McDonald’s has been focusing its efforts on value. Its Dollar Menu now has options at $1, $2, and $3. And it’s making ordering more efficient by offering mobile ordering and in-store touch-screen options.

McDonald’s has also worked hard to improve the image of the food itself. The way the store has done this is by highlighting the fresh beef in its burgers.

Starbucks

Starbucks has gone a much different route than McDonald’s when it comes to the direction of its business. The coffee company has focused on expanding its menu to new coffee roasts, new specialty drinks, and its popular blonde roast.

Starbucks has also launched a line of Reserve coffee bars and roasteries that cater to a hipper taste. These locations add a high-class feel to the brand.

Current Performance

McDonald’s is the more established company, and it’s no shock that the restaurant is the biggest player in the market when it comes to fast food stock stocks. But let’s look at the numbers more closely to see what we find.

McDonald’s

Right now, McDonald’s (MCD on the New York Stock Exchange) boasts a dividend yield of 2.43%. The company’s net common payout yield is 6.89%.

McDonald’s claimed more than $5 billion in fourth-quarter revenue last year, resulting in $1.71 adjusted earnings per share, or EPS, in the fourth quarter of 2017. Because the company’s operating costs rose, that’s actually a decline in quarterly revenues, but it is an increase in EPS.

Starbucks

Starbucks Corp. (SBUX on the NASDAQ) is currently sporting a dividend yield of 2.28% and a net common payout yield of 8.07%, beating McDonald’s in the latter category while trailing just a bit in the former.

The coffee chain reported revenue for its first fiscal quarter, which ended in December, north of $6 billion, with an adjusted EPS of $.65. The company’s revenue and EPS are up, though its operating income is down.

Future Forecast: Starbucks and McDonald’s

McDonald’s has had a dramatic stock turnaround in recent years, and it continues to boast robust numbers. It’s the number one fast food stock, and that looks to be the case for the near future at least. If you’re choosing the safer bet, consider buying McDonald’s stock.

But Starbucks is gaining ground quickly, and it seems to be the company better suited to adapting to changes in customer habits. Incidents like the one in Philadelphia earlier this year don’t help the brand, but the company has responded to such incidents quickly and decisively.

If you’re betting on the stock with the highest chance of reward, Starbucks might be for you.

Once you’ve settled the Starbucks and McDonald’s debate for yourself, take a look at our other investing tips.

How to Double Your Money with Your Investments in No Time Flat

You should get aggressive with your passive income, and we’ll show you how. Click here to learn how to double your money in no time at all.

According to recent research, debt is more common than ever. In fact, most people die with a whopping $62,000 in debt.

As a result, many people may be looking for ways to claw their way into the black. And you can do it with investments if you invest wisely.

In this article, we’ll talk about how to double your money with proven methods. In some cases, it may take several years, but the methods are pretty much foolproof.

Ready to go double or nothing? Read on!

How to Double Your Money with the Rule of 72

The rule of 72 is a classic way to double your money. While tried and true, this method could take a while, so you should be aware of that when you start.

This is a pretty simple rule. It states that the amount of time it will take you to double your money is the number 72 divided by the rate of return you have on your investment.

If your rate of return is 8%, you will divide 72 by 8. The answer to this equation is 9, meaning it will take you 9 years to double your money.

This method is fairly even and simple, even for those of us who aren’t math whizzes. And it’s proven to double your money, as long as you don’t touch the money you’ve invested.

Investing in Bonds

Bonds are slow to grow, but they’re a sure bet. You won’t strike it rich with a bond, and it’ll take you a while to double your money. Nevertheless, if you’re patient, you’ll earn a return.

These types of investments have almost no risk. The only way you could lose a bond is if a bank went completely bust a la the stock market crash of 1929. But since that’s relatively rare, you’re in safe hands.

Most bonds mature at a rate of about 4%, which isn’t great, but it’s better than nothing.

Doubling with the 50/50 Strategy

A 50/50 approach requires some risk in order for you to double your money. This one doesn’t guarantee you’ll double your bet, but it’s safer than plucking everything you have into a stock and seeing what happens.

With this method, you’ll invest 50% of your money into a bond or a CD. This way, you’ll surely have some money left over. Not only that, but you’ll have money that is actually actively earning interest.

Then, you’ll take the rest of your money and invest it in the stock market. Don’t be reckless and place it on a new company, but choose your stocks to invest in wisely.

If you get lucky, you might find yourself quadrupling your money, or even getting a higher rate of return.

You can use a money calendar to see where you’re at in your investments at any given time.

But, you do run the risk of losing everything you placed on the stock market, which is why experts suggest you leave 50% of your money untouched in the safety of a CD or bond.

Double Your Money with an Employee Retirement Plan

Some employers offer you a retirement plan that doubles the amount of money you’ve put into it.

While this isn’t as thrilling as stocks, or possibly isn’t even as satisfying as watching money mature in bonds, it’s a sure bet.

You can speak to your employer about your retirement package and whether or not they match contributions for you. If they do, this is a quick and sure way to make sure you double your money immediately.

If you still want to take some risk, you may want to put in 75% of your savings and have it doubled. Then, you can invest the rest on the stock market to play your odds. Who knows? You could walk away with a much bigger nest egg than you originally planned for.

Are Stock Markets Predictable?

While you can work with stockbrokers to try and invest in the very best stocks or the ones most likely to rise, you should be aware that nothing is guaranteed. While putting your money in stocks is a little bit safer than using your entire savings to buy lottery tickets, there is still a lot of uncertainty.

A recent study from Vanguard says that at least 60% of the stock market was unexplained after analyzing data from as far back as 1926. This means that educated guesses and using stockbrokers can only guarantee you so much. And that guarantee is about 40%.

As such, past success doesn’t seem to have much bearing on future success. Or at least, it only accounts for 40%. The rest seems to be up to an act of God. Therefore, there is a fair amount of luck involved in hitting it big on the stock market.

Because of this, you shouldn’t expect to double your money on the stock market, at least not right away. Instead, you have to think of it as a game of chess. You’re playing to win, not checkmate your partner on the very next move.

Padding Your Savings Account

After reading this article, you’ve likely learned that how to double your money depends on whether you want to play it safe or go out on a limb. Either way, doubling your money is totally possible, but it’s only guaranteed by going slow and steady. After all, that’s the only way to win the race.

Need cash now? Learn about the pros and cons of personal loans here.

4 Things You Should Know About Investing In a CD

A CD (Certificate of Deposit) is a financial product that is provided by financial institutions such as commercial banks or a credit union. When you invest in a CD, you are simply putting your hard earned money in a bank for a specified period of time that’s usually between 3 months and 5 years. Once the specified duration has lapsed, the bank gives you back your money with the accumulated interest. Most people use CDs to save money for a rainy day. However, some people confuse them with government bonds. There is actually a clear line between the two investment options. When you invest in a bond, you are simply loaning money to the government. But with a CD, your money is kept in a bank until the maturity date. If you are new to the world of CDs, it’s advisable you read the points outlined below to know more about this amazing investment tool.

  1. It’s a Low Risk Investment

This is definitely the good thing about investing in a CD. Unlike other investment options that depreciate with time or due to political and economic issues, an investment in CD remains stable regardless of the changes in circumstances. Even if the government announced an increase or a decline in interest rate, you would still make profit from your investment. The other advantage is that your investment can’t vanish into the thin air like a scam. This is because all CDs are protected by FDIC. You can therefore have peace of mind after you have put your money in such an account. It’s better to invest in a CD and earn a small interest than to venture into a risky business where the returns and seed capital are not guaranteed.

  1. You have to be Patient

A CD investment is not a get rich quick scheme. You can’t make money in an overnight just because you have put money in a CD. You must actually wait until the specified maturity date to be able to withdraw the principal and the accumulated interest. This means that you should never invest with money that you will need in the near future. Remember, the longer the investment period, the more profit you will make. Keep in mind that requesting for a withdrawal of funds before the maturity date attracts a huge penalty.

  1. It Yields More Returns than Checking and Savings Account

This one is a no brainer. A savings or checking account earns a very low interest when compared with a CD account. This is because you are allowed to access the money without any limitations. Regardless of the period you want to invest, the difference between the interest earned from CD and ordinary accounts is too big. A CD actually generates an interest that’s more than double the interest that’s earned from savings and checking accounts respectively.

  1. You can tell the Amount you will earn After Maturity

Most people prefer to invest in CDs because it’s possible to budget for the money before you earn it. In other words, you can confidently count your chickens before they hatch. This is due to the fact that the interest rate that’s allocated to your money is permanent. You can actually boost your earning potential by finding the best Jumbo CD rates. In fact, you can keep renewing your CD after it has matured as long as you don’t intend to use the principal amount in the near future.