Are you ready to start trading CFDs? CFD trading doesn’t have to be complex. In fact, working with the right CFD broker can make all the difference. In this article, we’ll cover how to trade CFDs with Omega International Trust by outlining a five-step process. If you have any questions, reach out to our team today to schedule your free consultation.
What is CFD Trading?
Contract for Difference (CFD) trading is an investment strategy that involves speculation on different financial instruments. CFD trading doesn’t give you ownership of the asset. Instead, you enter into a contract with a broker based on the current and expected future price.
CFD trading has a variety of benefits, from endless market opportunities and the ability to leverage investments to extended trading hours and hedging options. As a result, CFD trading can be a great primary or complementary investment strategy for your portfolio.
CFD Example
Let’s look at an example of a profitable CFD trade. You believe that the price of EUR/USD will increase. As a result, you decide to open a long (buy) position for this currency pairing. At the time of your investment, the price of EUR/USD is 1.1000, and you decide to use a leverage of 1:200. Your current account balance is $1,000, and you want to use $250 as the margin.
Your trade size is calculated by multiplying your margin by your leverage. Using the above numbers, your trade size would be $50,000. Converted to EUR, your trade size is 45,455 EUR. Now, let’s say that the price of EUR/USD rises to 1.1050. This results in a profit per unit of 0.0050. Multiplying this by the trade size of 45,455 EUR and your profit is $227.28 (before any fees).
Now, let’s say that the EUR/USD price declines to 1.0950. Instead of profiting 0.0050 per unit, you must repay 0.0050 per unit to your CFD broker. When investing, losing money is always a possibility. However, by completing thorough due diligence and setting up safeguards, you can protect your investments.
5 Steps to Trading CFDs with Omega International Trust
Now that we’ve covered an example of CFD trading, let’s go through how to start trading with Omega International Trust. Here are five steps to trading CFDs using Omega International Trust as your CFD broker:
Step #1: Create an Account
Before you can start trading CFDs, you will need to create an account. This can be done by reaching out to Omega International Trust through their website. Once your contact information is received, you will schedule a meeting with a team member to discuss your investment options and goals. This team member can also start the process of opening your account.
Omega International Trust is a professionally managed trust, meaning you have an expert to turn to each step of the way. To get started creating your account, visit this link.
Step #2: Research Trades
After your account is created and funded, you will need to start researching your trades. Remember, research is critical to avoid large losses from your CFD trades.
In the Omega Trust International app, head over to the search function. Once you find a prospective trade, you can review historical information and information about the instrument.
Trade research should also occur outside of the Omega International Trust platform. Research recent news, regulatory changes, and market conditions that would impact your trade.
The more information you can gather prior to making a trade, the greater the likelihood of a positive result. In many cases, a quick Google search is sufficient to pull up relevant information.
Step #3: Create Order
After you find a trade that looks profitable, you will select “trade” from the upper right corner of the information screen. On the “create order” screen, you will be able to select your leverage and the amount of margin you want to spend. You can also adjust the order type, choosing between market, limit, stop, and OCO.
One of the advantages of using Omega International Trust is the ability to set different protections to avoid large losses and lock in profits. The first type of protection is a stop loss. This feature will stop the contract from incurring any losses outside of your parameters. This helps you limit your losses and ensure the contract doesn’t cause financial disruptions. Remember, it’s best to only invest funds you can afford to lose.
The second protection order is the opposite: to lock in profits. Once your profits hit a certain point, the contract will close and you will receive the profits. This can help you reach your profit goals without having to micromanage your trade. Both of these protections can easily be set up before finalizing the order.
Step #4: Monitor Trade
Even if you set up the necessary protection orders, it’s important to monitor your trades.
You can manage your positions and orders through the “portfolio” section on the app. Here, all your current positions and outstanding orders will be listed, helping you understand tentative profits and losses. You can also track your free and used margin and manage the balance in your account.
For trades that you are considering placing, you add them to your watchlist. The watchlist section will consolidate all potential trades into one central location, giving you the ability to quickly jump on new opportunities.
Step #5: Finalize CFD
The final step in trading CFDs with Omega International Trust is to finalize your position.
This means closing out your position, whether that be a gain or a loss. Finalizing your CFD trade depends on the length and parameters you set. It’s not uncommon for certain CFD trades to span months.
However, it’s important that you don’t forget about your CFD positions. This can lead to unexpected losses. Closely monitoring your positions is best.
Getting Started
Getting started trading CFDs with Omega International Trust isn’t complicated. For more information about the next steps, reach out to one of our team members today for your free consultation.
