CFD trading Singapore: Three Essential Features of Trading Systems

As CFD trading in Singapore gains popularity many people want to know about the best CFD trading system.

However, before we get into CFD trading Singapore, it is necessary to understand what it actually means. CFD trading Singapore basically refers to a derivative product based on an underlying asset where a buyer and seller agree to pay or receive on the basis of difference between the closing and the opening price. No physical ownership is involved and a trader may sell or go short without prior ownership.

Just like any other trading system, a system for CFD trading Singapore is basically a set of criteria for determining entry and exit levels. It may be a mechanical process or discretionary or both. A fully mechanical CFD trading Singapore system means that you adhere to pre-defined rules and you are relieved of having to take decisions.

A discretionary system means that you have to spend a lot of time to learn how to trade and practice trading. You could do that under the tutelage of an experienced trader who can teach you how to use the system’s rules for increasing the number of profitable trades.

Regardless, any CFD trading Singapore system must include the three essential features.

- Stop loss feature. This allows you to exit a trade the as soon as the market starts going against you.
- Trailing stop loss feature. This allows you to lock in the profit when the market goes your way and lets you remain in a profitable position as long as the market keeps moving favourably.
- Acceptable risk-to-reward ratio. This refers to the ratio between how much you stand to gain if the market moves favourable and lose if it moves adverse to your position.