Major trade wars, coronavirus, and political tensions like the election mean that a majority of the world's richest investors are preparing for a sharp stock market decline in 2021.
With the help of CFD (contract for difference) contracts, you can get a positive return even though the market is falling. To go short means that you sell an asset that you do not own, because you assume that it will decrease in value, and then buy it back at a lower price. You can gloss over virtually all markets, such as stocks, indices, commodities, currencies and cryptocurrencies.
3 tips on how to use your trading strategies to make profits when prices fall:
1. Do your analysis
There does not have to be a fundamental error in the pricing of a financial instrument to have reason to take a short position. An active investor / trader benefits from short-term price changes.
2. Decide on a price level in advance
Once you have done your analysis and decided which leverage you want to use, you should decide at what price you are willing to short on. In a CFD platform, you can set the price you want to open a position at, then the order is executed automatically when the desired price level is reached.
3. Have a plan for when you will take home a profit - or limit a loss
It is important to have decided in advance where the pain threshold for the loss is and also at what level it is time to take home a profit. You can use both take profit and stop loss. An order type that takes home the profit, or limits the loss at the level you have chosen in advance, completely automatically.