Trading is as profitable as it is complex and requires attention.

Precisely because of the risk you run!

The Stock Exchange, and more generally financial markets, are not a “race” mathematically proportionate to the “bet” undertaken. What does it mean? A game, in order to be even, should correspond to a fair percentage and/or equal to the same probability that you have of losing. Every time you open a position/operation in the market, you are statistically 50% likely to lose and 50% to win. Very rarely, however, can a yield of 50% be achieved with a single transaction and, even if there were, such an opportunity, there would most likely be a tendency to close the transaction long before it reaches its target.
The reasons that drive the trader to anticipate the closing of the position are almost related to the so-called greed, time and the dynamics of the markets themselves. When you earn, you tend, out of “selfishness”, to cash in/monetize the result immediately, and this is because the fear arises unconsciously that the market, or the betrayed stock, can reverse its trend. In the second place there is the time factor: to get to earn 50% (usually) it takes a very long time, since not even the most flottuous tools can enhance this type of performance. Thirdly, before reaching 50%, there are very significant negative flottuations/oscillations that make the closure of the operation almost inevitable.
The only way to improve results is to control as much as possible the level of risk to which you are exposed when operating in the markets and, the most common problem, when trading online is precisely to become aware of the danger/threat that you may encounter during the operational activity.
The path we will outline in this guide is about knowing tools designed to protect financially exposed capital in particularly risky and complex markets and assets such as CFDs. In this case TRADING SIMULATORS can guide the investor in minimizing losses, therefore, the best strategy, to minimize financial risk, is the right “confidence” that is acquired through the use of support tools and can be distinguished into two categories:
1) Valuation trading simulators.
2) Learning trading simulators.
1) Valutation Trading Simulators:
They are called DEMO ACCOUNTS and are offered by online brokers to gain confidence and practicality with online trading activity and allow, through the activation of a free account, the use of the trading platform but with virtual money, deposited and dedicated exclusively to functional exercise through completely virtual financial transactions. Therefore, the aim is to give the user/investor the opportunity to understand its technical operation by evaluating its service with the aim of arriving in the opening of a real deposit account.
This type of account is activated free of charge, therefore without commitment, and is aimed at a predominantly home user or a private investor with little familiarity in that type of financial instruments where, in most cases, they provide underlyings such as leverage and maintenance margin.
The approach, to these valuation simulators, exactly reflects the trading activity reflecting what, in reality, the trader will find himself having to follow and manage where, however, the emotional aspect is completely canceled.
The reason is simply due to the fact that the aspiring investor, plays a completely marginal role as, the virtual, totally disconnects emotions and situations by zeroing: tension, fear and adrenaline but on the contrary amplifying enthusiasm. This factor means that the positioning obtained is not entirely natural and real by distorting/distorting/modifying the results in fact, in most users lose their money (source Plus500).
2) Learning Trading Simulators:
They are the best solution for calculating the risk of trading based on financial mathematics with a purely didactic format designed and designed for a predominantly technical approach to the exercise. In essence, they are mathematical trading simulators that literally perform the function of statistical/predictive calculators for the management, in preview and scheduled, of the investment that will really have to be made.
This type of method offers a more defined investment vision in relation to the target to be achieved, therefore, oriented in giving security by training individual skills both on the analysis and on the understanding of the data produced, showing a more realistic and clear scenario of the situation compared to the demonstration accounts.
Also in this case you operate only and exclusively at a virtual level creating a real financial map of the position even before actually applying it through your broker or financial intermediary (banking institution).
These software, therefore, mainly carry out the economic budget planning activity where the issues that the financial asset may encounter during the trading phase are significantly identified.
For example; one of the many critical issues, frequently encountered, are given by the variables on the change of the trend on the stock or the market to the occurrence of events that are difficult to predict or unexpected, the main cause of sudden sharp deviations and fluctuations, on prices that can generate great operational difficulties.
Thanks to this type of simulation, this phase can be managed and controlled through “predictive planning” that crystallizes its actual size on the potential loss when the event occurs giving greater security and control over the monitored asset. ” This type of management is part of the risk management practices that every investor should know to protect their capital”
The advantage of predictive planning is therefore to offer a concrete and solid utility in minimizing risk exposure during the trading phase by optimizing financial governance both in the short and long term in relation to the solidity of committed capital and that available against possible hedges.

“The goal is therefore to highlight all possible critical issues by assessing their financial robustness and respective time sustainability”

The concept lies precisely in establishing the relationship between the initial capital and the share intended for the investment with the underlyings that each CFD instrument incorporates (type of leverage, margin, spread.). )The formation of the metrics produced, from this match, generate a series of indicators and graphs to support the understanding of the real financial exposure that will have to be faced in proportion to the capital invested.
A trivial basic calculation is given by this formula: if you lose 50% of your starting capital of $100, you are left with $50 (100 -(100 * 50 / 100) = $50). However, if you start with $50 and earn the same percentage you lost – 50% – you will end up with $75 (50+ (50*50/100) = $75).
If we add leverage (e.g. 1:10) to this simple formula, the final result can increase tenfold reflecting its strength (positive/negative) both in terms of profit and loss which, in this case, will be $ -250.
The multiplier effect therefore plays a predominant role in the calculation of risk.
This is just a simple example of how the mathematical trading simulator interprets the data by providing a basic indication of potential profits and likely losses in relation to the price/quote deviations that the betrayed stock may suffer over time.
We can say that, the advantage generated, from the learning simulation, “prepares/forms” the investor to a real vision on the size of the risk exposure on his capital through dynamics that the evaluation simulation, does not offer although fundamental in the initial training of theaspiring trader.