Trading CFDs After the Brexit
Contracts for difference are a very popular alternative investment method thanks to the ability to capitalise upon price movements without physically owning shares. When this trait is combined with substantial returns and a wide variety of assets, it becomes clear why many traders consistently choose these instruments. We also need to appreciate how specific CFD trading strategies could change when taking the Brexit into account. How can investors profit within such an unpredictable climate and what are the best strategies to deploy immediately after the Brexit takes place?
| Broker | Min Account Size | Leverage | Spread | US Traders | Review | Open Account |
|---|---|---|---|---|---|---|
| $1000 | EUR/USD: 0.6 | Review | Free AccountDemo |
Start Early
While the Brexit has made major headlines in recent months, we must never forget that negotiations are still taking place. It will likely be between two and three years before the move is finalised. The good news in this case is that those who are not familiar with CFD trading can hone their skills during the interim. A bit of technical knowledge can go a long way in this case. Chart patterns are some of the most commonly employed methods to predict future CFD prices and these should be well understood. Some frequent examples will include:
- The head-and-shoulders pattern.
- Double- and triple-tops.
- Triangle patterns.
Although a working knowledge of such indicators will provide a powerful edge, the majority of successful traders will utilise CMC Markets to further clarify and underpin the discrete movement of CFDs at any given time. Intuition alone is never enough to produce sustainable wealth.
The Question of Leverages
Anyone who is vaguely familiar with the CFD market is already aware that leverages can play an important role. How can the typical leverage be applied during and immediately after the Brexit? This is a very interesting question and the proverbial jury is still out in regards to specifics. Still, there are some powerful takeaway points here which are worth mentioning:
- Currency traders will be watching the value of the pound during and after any type of official announcement.
- The prices of domestic shares within the domestic manufacturing sector are likely to be affected.
- Major indices including the FTSE and the DAX could be impacted in terms of aggregate values.
The movements and values of these assets will naturally be determined by the climate at the time of the Brexit itself. One could argue that this could be a perfect opportunity to employ leveraged CFD trades. However, such actions should only be undertaken by those who are already familiar with their mechanics as well as the potential to incur substantial losses.
The Right Tools at the Right Time
The fundamentals of CFD trading will not change due to the Brexit. If anything, it is likely that we will witness an influx of investors into this sector due to the short-term and bi-directional features of a given trade. The tools and products offered by CMC Markets should therefore be employed in order to stay abreast of the latest news. Advanced charting features, intuitive platforms, mobile-responsive designs and a host of underlying assets will all help to increase profit margins during such an unpredictable time.
| Broker | Min Account Size | Leverage | Spread | US Traders | Review | Open Account |
|---|---|---|---|---|---|---|
| $1000 | EUR/USD: 0.6 | Review | Free AccountDemo |