Trading CFDs in Norway can be highly profitable but do come with substantial risks attached. For the trades to go in our favour, we need a significant price movement within a short period.
Know what you’re doing before starting
Before making investments, it would be wise to learn about trading CFDs with CFD providers, like Saxo, since not every provider will offer the same conditions.
Every country is different, so even if your CFD provider offers rather good investment conditions, they may not apply to you being in Norway.
Also, every region has its advantages and disadvantages regarding taxes & taxes on profits make this more complex than just choosing a location where the best deals are offered.
To avoid over trading with CFDs, you should always have a plan or strategy containing specific rules that are strictly followed by default. It will make most of the cases easier & less taxing mentally.
X times out of Y, you will lose on your investment
It’s a significant one since I’ve known people that have lost their savings because he thought they could beat the market and make a profit continuously, but let’s face it:
- No one can predict future price movements with 100% accuracy, and
- If we go long enough without making any profits, we’ll eventually run into those few cases where we fall below our initial investment.
There is no shame in admitting this, as this is how trading works. The more experience you gain as a trader, the easier it gets to know what to expect from the markets, as there are so many indicators & tools available online that can make this job a lot easier on us.
Follow your trading plan.
There are no perfect trading strategies because every method has its ups and downs, but if you can find one that suits you & is based on realistic assumptions & statistics, then use it!
Be sure that even good strategies need some tweaking over time as they are not set in stone.
A certain level of adaptability is required for long term success with any approach to trade CFDs, so do not fall into the trap of thinking you have to go along with whatever floats or sinks the river even though it does not suit your style or risk appetite.
Avoid overtrading by doing simple risk management.
Experienced traders should know how to control their emotions, and also we should see the difference between the trade we want to take and that one that would be a “fun” trade, but remember:
- The better you get at trading & controlling your emotions, the fewer losses you’ll have over time, as it’s challenging to keep working & following our strategies if we’re losing money because of being upset or lacking concentration.
Taking smaller sized trades is an excellent way to limit our risk, especially when trading CFDs since they can’t move in fractional points, so this leaves us with only two choices:
- To buy 100 shares for 500 dollars to use a CFD and
- Buy ten shares for 50 dollars.
The former would be real overtrading.
Therefore, the latter gives us more options and is better for our risk management approach called position sizing, which all short-term traders should have at their fingertips.
Save up some money outside trading accounts.
The last thing we want is to lose everything because of being impatient while everyone else around us seems to be making good profits without any problems.
At the same time, we’re stuck in a negative trend regarding our investments.
Listen: Trading CFDs can come with substantial risks, but even if we restrict ourselves from placing too many trades or going overboard by making risky investment decisions, we can still go bust if we take too much risk at once.
Set up some savings plans before you start trading CFDs.
This is an important one since it’s also easy for us to forget about the natural world around us while getting lost in the markets and losing touch with reality as a result.
To ensure this doesn’t happen, set up a plan to put aside some savings every month, which you do not touch until your trading account has reached a certain level.
This way, if something goes wrong or you get lazy/overconfident thanks to good results from past trades, then there will be money available for paying rent & other bills without having to worry.