Within this blog you will from now on learn the business of day trading from scratch. Whether you are a greenhorn or already a profitable day trader, you will find a complete trading guide that will babystep you from the beginning to the end. So if you don’t want to miss any new article in this section, please make sure to subscribe to our RSS feed.
Once you start daytrading you need to know that due to the leverage effect your profits can be overwhelming, but your losses as well. So please bear in mind that you should always trade cautious, reasonable and apply a proper risk and money management.
What is the advantage of forex and cfd?
Most people have experience in “trading” stocks, they mainly apply the “buy and hold system”. This system seems to be quite simple. Just pick a good stock that you consider undervalued, buy it, go to sleep and when you wake up you are a millionaire. At the first glance it looks easy but in fact it isn’t. The main problem is: There is not just one direction in the markets. Instead they can go up, sideways or down. On the traditional stock market you can only make money as long as the markets go up. As soon as they’re starting to fall, you will get into a panic and sell and buy stocks headlessly and thus lose all your money you generated in the uptrend. With forex and cfd you can make money in either direction: As soon as you think the markets will fall you can open a short position and thus profit from falling prices.
Long and Short
So in this first article of our new section called “learn trading from scratch” we are talking about “Long” and “Short”. What does that mean? When I started daytrading several years ago I thought “Long” means to keep a certain trade over a long period of time whereas “Short” means you close your trade pretty soon. But it isn’t. Instead, if you open a Long position you expect a rising price, or that your asset increases its value, if you open a Short position (sell short) you expect a falling price which you want to profit from. So the main difference and advantage compared to the stock market is: With forex and cfds you can make money in either direction. But you should not just jump into the market because you think of this or that. Before you enter a single long or short position you should wait for a valid long or short trading signal. If you subscribe to this category we will show you in the future some profitable trading strategies.
Metatrader 4 platform
This was the first article of our new section “learn daytrading from scratch”. In the next article will give you a short video instruction into the Metatrader 4 Platform. Before you start trading it is absolutely vital to know all it’s basic functions in order to keep your trading under control. If you have any specific question related to trading just drop us a comment in the comment section below.