CFD trading allows traders to go short, enabling them to potentially profit from a falling market or go long in a rising market.
Traders choosing to trade on Apple's share price - following their Q2 earnings announcement on Tuesday 24 April 2012 - can potentially enhance their ROI using a CFD (Contract for Difference) as it's a leveraged product; therefore maximising their market exposure for a small fraction of their investment.
However, traders must remember that higher leverage can result in losses greater than their initial deposit.
Keeping this risk in mind; the following tips may be helpful for traders looking to trade CFDs on over 9,000 global markets; including Apple shares with City Index Asia.
Know Your Markets: Apple Shares
The most experienced CFD traders will tell beginners that it is important to trade markets that you know. Through City Index Asia, you have a range of CFD markets to choose from, so you can choose a market you understand and know more about.
If you're looking to trade on Apple shares; you should be keeping up-to-date with financial news, share prices, stock market changes and company reporting dates - such as Tuesday's earnings announcement - as these all can impact your trading choices.
Set Realistic Markerswhen trading Apple shares
Before you begin to trade on Apple shares, you should have reachable goals implemented and a well developed CFD trading plan.
So a general guide to help you reference your progress as you trade.
Main pointers should include:
• Profit goals (daily, monthly and yearly)
• Trade size
• Your Maximum losses
• Entry/exit point
The last two points are crucial to managing your risk as these will affect where you set your limit orders and stop loss orders (read more below).
Choose between a Standard and Guaranteed Stop Loss Order (GSLO). With a guaranteed stop loss you can close out a position at a pre-arranged level regardless of any market volatility or price gapping (slippage).
There is a small charge for putting a GSLO in place which can vary across different markets.
Trading CFDs on Apple Shares
You can prepare for trading CFDs on Apple shares by creating a trading plan and practicing first with a demo trading account from City Index Asia.
Remember that trading CFDs on margin carries a high level of risk, which may not be suitable for some investors.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
City Index is a leading global provider of margined foreign exchange, CFD trading and in the UK, spread betting. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.sg/