One of the attractions of an online CFDs trading platform is that one is allowed to engage in round-the-clock trading, just the reverse of the traditional stock markets which have a fixed time for trading. This flexibility allows prospective traders to take advantage of the global market movements of the various asset classes, including stocks, commodities, and indices, around the clock. The fact that financial markets around the world have different time zones presents an opportunity to execute trades throughout the day. For instance, New York may close its stock exchange for the day, yet the Asian or Australian market may still be open, and thus one has the chance to react to information and events as they emerge.
Yet, although this round-the-clock characteristic of CFD trade presents some key advantages, it also bears some challenges: Constant access to the markets does not allow traders to avoid overtrading, especially if the traders feel the compulsion to be constantly in the market. For that reason, it is essential to be disciplined about trading hours and not get so accustomed to spending time in front of the screen that the motive is just to be in the market. Using automated trading systems and making your alerts, as well as other related devices, will minimize sitting in front of the screen and make the trader less prone to make impulsive decisions. These features allow trades to be started based on preset conditions, without the need for constant supervision.
Another aspect of online CFDs trading is leverage. The potential to make significant profits because of trading on margin increases the risk of substantial losses if the market moves against one. This scenario makes risk management even more pertinent when trading in a 24/7 environment. One of the best strategies to use with stop-loss orders is to protect profits and limit losses. Sometimes, the trading platform can be so arranged that when the market moves against the trade, this will automatically close the trade.
Another problem encountered in trading around the clock involves volatile markets. Periods may calm out, but at any time, global events or economic releases may take place and trigger rapid price movements. Although such times of volatility may present some lucrative opportunities, they also open doors to risk. A trader who is conscious of when the markets are most volatile-that is, at overlap periods between major markets-is at an advantage to capture a wider trading volume and higher liquidity, which should lead to better price action.
Successful 24/7 CFD trading depends upon a good strategy and knowledge of global events that will likely influence markets. It may appear to be flexible enough, thus providing an opportunity for quick profits to surface, but it does require discipline in managing the risk and careful planning so that you don’t end up overtrading or making emotional decisions. If you use the right approach then 24/7 CFD trading is exciting and rewarding. That means, you have insights on economic reports, geopolitical changes, and market sentiments that can help you stay in the game. You can then deal with the ever-changing environment with your risk management plan firmly in hand, and alongside knowing how to disengage emotion from trading decisions.