Contract for Difference CFD Trading Tips: Is It Really Worth It to Ground Floor?

To be good at this trading game, you need to try to keep up with all the news, with the geopolitical events and the global financial situation. They can cause large market movements and they will take traders by surprise. However, you need to keep in mind that there’s no assurance that one news can affect the market for the better or for the worse.

But if you know things about the current events, you won’t be making trading errors, but you’ll minimize your losses.

Why should you keep up with the news?

If we are to take an example, we can talk about the elections, which are capable of having a great impact on the currency of the country. And it’s because of the political instability that’s shown during the days of the election, which have the volatility in the value of a country’s currency as an outcome.

The traders from Forex monitor the pre-election polls to see what could be the outcome. But after the 2015 election from the UK, we saw that those polls aren’t really accurate. If the government changes, then policies will change too – if they come with a new approach on how to spend money, this will influence the value of the currency. Also, the political parties which are focused on promoting the growth of the economy can mean a change in the value of the currency. Think about this: if a party that’s a great candidate for the position of power and it’s at risk of losing this, traders may sell that country’s currency. Futures CFDs trading can be affected so easily these days.

Observe the pre-market trading

The pre-market trading is a period of time in which the action happens before the official opening of the daily stock market that happens on every trading day. The companies release the quarterly earnings figures when not in the trading hours – they get an idea of how markets will react to these announcements.

These outside trading hours can help in anticipating the market movement, by giving clues about the level of the stock market – including when will it open. It also lets traders to set stop orders if the particular asset seems to be depreciating or appreciating in value.

But you need to keep in mind that you have to be cautious when it comes to this, as no one guarantees that it will go onto the same direction when the stock exchange opens, if the security of the market level moves in a particular direction in pre-market trading. Follow Forex live trading room for more news.

Ground floors should be approached with caution, too

Traders may start to like the idea of ‘getting in on the ground floor’ once they heard about the value of a security plummet. They will buy that security at a low market price and they hope they’ll get a profit when its value will increase. But you need to think this through before going all in. You don’t know for sure if the security will increase or decrease. Follow Forex live trading room for more news