Investing

Do you ever just “know” something’s right?

Investors in different walks of life will often tell you the same thing; there are times when they just have a gut feeling that something is right. If you’ve been investing in any way for a while, you may know this feeling yourself. It can be as simple as having bought a good home at the right price.

For investors who trade a lot, buying stocks and shares, for example, this gut feeling is usually also based on sound fundamental analysis and in-depth knowledge of a business sector and/or of a company’s balance sheet etc.

For other investors, this may be based more on what is called “technical analysis” or charting. This involved looking at patterns of share prices and other investments to predict where the price is likely to go to from any particular point in time.

When your gut feeling marries up well with your own detailed analysis – it’s often a good time to strike. One of the best ways to do this to leverage up your gains is via CFDs (“contracts for difference”). There’s plenty information around the web on CFDs – but they’re basically leveraged products that allow you to speculate on the margin prices of underlying investments. With a share, for example, you’re speculating that it will go up or down and investing a relatively small amount on the marginal differences in price. In this way, your gains or losses become magnified for a smaller outlay in cash than buying the underlying investment itself.

If this sounds at all complicated, don’t worry – it isn’t. The best platforms have plenty information to help you understand CFDs and enable you to trade in demo mode with no real cash involved. Trading with Tradefair CFDs, for example, is excellent as there are many different tools to help with your analysis and you can trade in demo mode only to your heart’s content. Tradefair is owned by Betfair and the same broad principles apply – in that you aren’t trading against the “house” in anyway.

The main thing to do is to get to understand the products and the markets in which you’re dealing in as much detail as you possibly can. The great thing about trading, then, in demo mode is of course that there is no real risk attached. Hopefully, this will give you a good indication of how much you can win or lose by trading CFDs. Using the site will also help you understand different ways to limit your potential exposure if markets go against you. This happens to all traders from time to time – so the trick is having tools in place that enable you to sleep well at night. The Tradefair site includes lots of information on the risk management side of things. But with any luck – you won’t need it!

Perhaps the best advice overall is not to over-trade. Early success is always dangerous in this regard – so try to learn to trade only when everything from your analysis falls into place – and your gut feeling tells you it’s the right thing to do.

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