As every CFD trader knows selecting a trade is not at all times the easiest job there are CFDs on thousands of equities to select from but which ones do you invest in? The majority of investors follow a particular variety of trading and select their CFDs according to selected criteria including liquidity and price, however not all traders have a strategy but rather base their investment on elements such as dividend returns or company valuations. Even when you don’t employ a strategy there are several critical factors that you ought to think about when deciding on which equity CFD to trade on-line, a couple of of these elements are outlined below.

Seasonality

With thousands of equity CFDs to select from one aspect most traders overlook when they start trading is stock CFD price seasonality, this is one of the most apparent factors influencing stock CFD prices. If it’s summer you must consider CFDs which historically have price moves up throughout this season or price moves down if you are bearish, examples of seasonal shares include retailers.

Technical Analysis

There are thousands of indicators in existence with the most common ones being MACD, volume, moving averages, RSI, CCI, stochastic and bollinger bands. Do not get bewildered by the countless thousands of indicators available, keep it minimal in the beginning. Using too many indicators is often confusing and can deliver varied alerts, it is advisable to start by using 1 or 2 simple technical indicators first like MACD and moving averages for instance, once you’re familiar with these indicators only then should you start experimenting others. A number of the most successful traders solely rely on technical analysis although at the beginning it’s advisable not to only rely on technical analysis alone while making your trading decisions.

Company Fundamentals

Almost all people overlook company fundamentals when deciding on a CFD to trade. One of the primary elements in choosing a share CFD is the company’s balance sheet and profitability, reading over the company’s balance sheet is vital ahead of making medium to long-term investments, naturally if you intend to engage in short term trades this is less significant.

Company Directors

Company management is something that most CFD traders fail to consider. Dealing in companies who’s management have a superb track record is always an excellent start. Not surprisingly management is more important to consider for medium to long-term investors, and less important for short term investors looking to reap the benefits of short term price fluctuations.

Global Market Conditions

It’s important to keep an eye on international stock market conditions as stockmarket movements are ultimately determined by the world economic climate. Currencies, commodity prices and world indices all have an impact on the local stock market and eventually your CFD positions.

Not surprisingly these are just some of the criteria CFD investors ought to take into account when entering into a CFD position. Every trader enters into CFD trades utilizing different criteria that suits their risk profile and investing habits, it’s always essential to develop your own trading strategy to suit your risk profile and lifestyle.