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Updated on: 16 April 2018

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Only the daring may apply

Making money with CFD trading is simple. Trust me. But making enough money to make a living off of it, that is an entirely different story. Can it be done, though? I believe this is the most common question I receive, most of the times coming, obviously, from beginners.

And I am glad I get to see so many people putting it out there. If they wouldn’t, they would probably prefer to just jump right into it and not worry about the outcomes. Simply by the fact that they are looking to find out more shows you that they are worried about the risks and are trying to find out more about the industry, before taking any.

It shows cautiousness and wisdom and I believe these are the people most likely to succeed in the business. However, before getting started, I would like to get some things off my chest. There are a lot of misconceptions about the CFD trading industry, as well as the trading sector as a whole, and I would like to break those apart, because, simply by doing so, will give you the opportunity to see everything a lot clearer.

Most common lies you have heard about trading

Whether we are talking about huge lies and misinformation, or simply innocent misconceptions, one thing is for certain – all of them have the potential to guide you in the wrong direction, often times with drastic consequences. This aspect alone shows why you need to take everything with a grain of salt and carefully research every aspect you need clarified.

With this in mind, the most popular misconceptions about the trading industry include:

– Everything is about luck – I have heard this on many occasions and I believe this erroneous idea is, quite frankly, the most popular among non-traders. And the reality is that it is completely false. Luck exists, nothing to say about that, but it is as important as it is in poker.

If you have ever played poker, you know what I mean. The less skilled, knowledgeable and professional you are, the more luck you need and vice-versa.

– You can get rich overnight – This is among the most dangerous misconceptions, because there are actually few cases where that ever happens. Professional traders often invest large sums of money for long periods of time and will only get a modest and, preferably, steady return rate. Nothing fancy and outstanding, because they don’t like risking too much of their capital.

Instead, they will be more concerned about not losing money.

– It is too hard to understand – This discourages a lot of people. Understanding trading is not hard and it is not complicated. It is, in my opinion, easier than learning for your driver’s license. Be consistent and put in some efforts and there is nothing that can’t be learned pretty fast.

– All brokers are scammers – Nope. Not by a long shot. You can get scammed if you don’t know what you are doing. But if you only resort to certified and regulated brokers, there is absolutely nothing to worry about. Your capital will be secured by some of the most competent regulatory organisms on the planet.

Surely, there are many other misconceptions we could be talking about, but that would mean stretching the article for too long and you are actually here to find the answer to a different question, aren’t you?

Can you get rich with CFD trading?

There is no straight “Yes” answer. Such an answer is inherently incomplete, because it fails to give you a comprehensive understanding on what you need to do to succeed. So, I never answer this question with a “Yes”. Instead, I use “Yes, but only if you…” and then I enumerate the steps to be followed that will get you there.

So, yes, you can trade CFDs for a living and, most importantly, you can get rich with CFD trading. As long as you will respect the following conditions:

1. Never dive in head first

What I mean by that is the fact that you should always know what you are getting yourself into. Learn everything you need to know about the trading industry. How it works, what the risks are, what advantages to take into consideration and how to identify and use patterns and trends to your advantage.

Information is power and going into the trading business completely blank is like going into the MMA octagon blindfolded. It’s not going to work.

2. Save your capital, no matter what

Big time trading players don’t care as much about profit as they do about protecting the capital they already own. Which means cutting the losses is more important than securing or maximizing the profit. I believe this is the best piece of advice I can give you.

Whatever you do, always focus on preserving your capital and only then, only after you have taken all the precautionary measures possible, worry about increasing your profit.

3. Do not overinvest, do not overtrade

If there is one thing that defines novice traders the most, then I guess that would be their passion and their recklessness. They invest large capital chunks, hoping for the Holy Grail of profits and overtrade both when the outcome looks positive and when it looks negative, in an effort to make their money back.

In other words, they lack the sense of measure and control. Do not fall into the same pitfall or your capital won’t live to see another trading day.

4. Segregate your capital

If you have $50,000 at your disposal, ready to be thrown in the trading market, take it one slice at a time. Only invest $10,000 at once. See what happens and then add another $10,000 chunk to your account. Don’t deposit all your money at once in the trading account, or you will be tempted to use them on the first solid gig you get.

And putting all the eggs in one basket is always a bad idea, especially if you are a beginner.

5. Always evolve and adapt

In other words, you need to constantly upgrade your set of knowledge. The trading market is constantly moving and new strategies appear on a regular basis. You need to know how to adapt to the changes, because the more you know, the more options you have in case you ever need them.

This is the key trait of a professional trader, for whom the CFD trading market is a money pit that never runs dry.

The 5-point money making formula

That’s right, everything you have read so far is 100% legit and it works with maximum effect each time. You can trade CFDs for a living. It is all up to you. There is no such thing as “luck is the name of the game”. That is a blatant lie, usually promoted by losers.

If you have the knowledge and you work on developing your skills, luck will only have a minor, insignificant impact. Just like in poker, remember? So, set aside all those misconceptions, follow these simple guidelines and never divert from your path.

The CFD business is open for everybody, but only the knowledgeable will succeed.

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