Mar 03 (newsonjapan.com) - Trading CFDs is a great way to maximize short-term gains.
They have no tangible assets, and their prices are based on what people think they will do, so it is possible to quickly make a lot of money if the market goes your way. The most popular place for trading CFDs in Japan is at Plus5 Trader since they have been operating here since 2002.
Now let's jump into some of the strategies you can use when trading frequently.
Start by mastering one instrument first.
If you are new or already know how to trade well - it helps to start with one instrument before moving on to others. It allows you to get used to everything involved in trading. As you become more experienced, broaden your horizons.
Time it right
As with most investments, timing is critical in CFDs. If the market moves against your position too quickly or too slowly, there will be less room for making money. It's best to choose a time when the market is moving fast so that you can maximize your gains without worrying about hitting your stop loss point too soon (this is when you sell the instrument to minimize any further losses since Plus5 does not cover them).
It also helps if the markets are sideways with no trend; this gives you room to make money but avoids betting on a direction that might cost you dearly.
Use proper risk management.
If you want to make money, the key is to know your stop-loss point. If you set that too close, you might end up losing more than what you can afford. Remember, if the market moves against you once, it will likely do so again (in fact, this is called a re-test). If there is no explicit support for your position and it seems like the prices are going southward fast, consider closing it early. It's not worth taking unnecessary risks when there are always other traders around anyway.
Use social media
You'll never have enough time to read through all of Twitter to find out what everyone else thinks about a particular instrument. It doesn't mean that Twitter isn't useful for trading CFDs - it just means that you have to learn how to use it right.
As time goes by, you will develop the ability to differentiate between fake news and genuine opinions about an instrument. You can also take advantage of automated trading or paid alerts (if you can afford them) like Sentiment Trader - which tell you directly when specific keywords are mentioned on social media.
Have clear goals
It's best if your goal is not limited to 'making money. Instead, consider what you want out of CFD trading in general - do you want steady income? Something short-term? Do you want complete control over your trades? The more specific your goals are, the easier it'll be for you to maximize your gains.
Use a CFD broker that accepts Japanese yen.
One solution is to use a Japanese-based or Japanese-friendly online trading brokerage company. Such brokers can be found using Google and allow traders to trade with other currencies. It's also wise to ensure the brokerage has a long history of operation and good customer reviews before opening an account and putting money in it.
Double-check that the broker's website uses SSL protection
Many trading websites do not use this protection on some of their pages. If a website does not use an SSL certificate, users' details could be exposed to hackers while transferring from their computer to the website's central server. Thankfully, most modern websites offer this security feature to ensure customer confidence in using their services.
Always check the broker's terms and conditions.
Before opening an account and trading, reading through a brokerage company's policies is essential. These will be located on a separate page from their main website.
The details one should look for are:- whether or not commissions are charged,
- what currency options there are;
- any penalties for early contract closure; how many decimal places can be used when placing trades;
And other related information that makes it easy to manage money while investing/trading.
