Tesla stock (TSLA) is currently trading at around $220. To trade stocks on the electric car maker, you have different options including through online CFD brokers like Skilling. However, like any stocks, trading Tesla involves understanding the market dynamics and employing strong risk management strategies. Here’s a simple guide on how to trade Tesla stock online, highlighting the steps involved and the importance of managing risks effectively.
Why trade Tesla stock?
- Innovation leader: Tesla is at the forefront of the electric vehicle (EV) and clean energy industry. The company is constantly innovating, which could drive stock prices up as new technologies and products are introduced.
- High volatility: Tesla's stock often experiences significant price fluctuations. While this adds risk, it also creates opportunities for traders to profit from rapid price changes, both when the stock price rises and when it falls.
- Market influence: Tesla is a highly influential company in the stock market. Movements in its stock price could have broader market implications, making it a key stock for investors and traders who want to be engaged with major market trends.
- Public visibility: Tesla and its CEO, Elon Musk, are frequently in the news, which can affect stock prices. For traders who follow market news and trends, this visibility provides many opportunities to trade based on the latest information.
- Growth potential: Despite its already high market valuation, many investors believe Tesla has room to grow, especially as it expands into new markets and refines its technology.
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How to trade Tesla stock CFD online with Skilling
- Create an account: Sign up for a Skilling trading account. You’ll need to provide personal details and go through a verification process to ensure compliance with financial regulations.
- Deposit funds: Once your account is verified, deposit funds using an accepted method such as credit card, bank transfer, or e-wallet. Make sure the deposit meets the minimum requirement for trading.
- Access the trading platform: Log in to Skilling’s trading platform. Skilling offers a web-based platform as well as mobile apps for trading on the go.
- Locate Tesla stock: Use the search function to find Tesla stock CFDs. You can search by the ticker symbol "TSLA" or just type "Tesla."
- Analyze the market: Before opening a position, conduct market analysis using available tools on Skilling. Look at technical indicators, recent news, and financial reports related to Tesla to make informed trading decisions.
- Open a position: Decide whether you want to go long (buy) if you anticipate the stock price will rise, or short (sell) if you expect it will fall. Enter the amount of your investment and set the leverage you wish to use.
- Set risk management controls: Place stop-loss and take-profit orders to manage your risk. A stop-loss order automatically closes your trade at a predetermined price to limit potential losses, while a take-profit order secures your profits at a set price.
- Monitor your position: Keep an eye on your open positions through the Skilling platform. Market conditions can change rapidly, and it’s important to stay informed and ready to react.
- Close your position: Close your trade when you feel it's the right time, based on your profit goals and risk management strategy. You can do this manually or it will close automatically if your stop-loss or take-profit orders are triggered.
- Review and learn: After closing your position, review the trade to understand what worked and what didn’t. This continuous learning will help improve your future trading strategies.
Technical analysis to consider when trading Tesla stock
- Moving Averages: This indicator shows the average stock price over a certain period (like 30 days or 50 days) and helps smooth out price fluctuations to identify the trend. If the current price is above the moving average, it suggests an uptrend, and if it's below, a downtrend.
- Relative Strength Index (RSI): The RSI measures how quickly prices are changing. Values range from 0 to 100. A reading above 70 usually indicates the stock might be overbought (too many buyers and it might be time for a price drop), while below 30 suggests it might be oversold (too many sellers and the price might increase soon).
- MACD (Moving Average Convergence Divergence): This tool helps identify changes in the strength, direction, momentum, and duration of a stock’s price trend. It consists of two lines that oscillate without boundaries. The crossover of these lines can signal an entry or exit point.
- Volume: The number of shares traded during a certain period. High volume often indicates strong interest in a stock at its current price, and it can validate a trend. For example, an uptrend accompanied by high volume is more likely to be sustainable.
- Support and resistance levels: These are key prices at which Tesla stock consistently stops falling or rising and then reverses. Support is a price level where a downtrend can pause due to a concentration of demand. Resistance is where a price may stop rising due to a concentration of supply.
Risk management when trading Tesla stock online
Risk management when trading Tesla stock online involves strategic actions to minimize potential losses. Key practices include setting stop-loss orders to automatically close positions at a predetermined loss level, thereby capping potential losses. Utilizing take-profit orders could secure gains by closing positions when target prices are reached. Diversifying your portfolio by not over-investing in Tesla alone could also mitigate risks. Monitoring your positions regularly to adapt to fast-changing market conditions is crucial. It's essential to stay informed about Tesla's market environment and broader economic factors that could impact stock performance, ensuring more informed and resilient trading decisions.
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Conclusion
As you've learnt, Tesla stock can be traded online with reputable CFD trading platforms like Skilling. However, it's important to always ensure you practice diligent risk management when trading. Utilize tools like stop-loss and take-profit orders to protect your investments, and stay informed about market trends and Tesla-specific news that could affect stock prices. Regularly monitor your trades and adjust your strategies according to market changes. Source: investopedia.com
