The best CFD trading strategy for beginners

trading

Then this is the right page for you! With more than 8 years of experience in the financial markets, I will tell you my straightforward investment strategy for CFD trading. Learn various rules to get started with a CFD trade accurately. The following simple set of rules will help you expand your profit.

CFD Trading Strategy Criteria

The following trading strategy for CFDs contains certain criteria according to which I determine an entry into the markets. Without criteria or a fixed set of rules it would not be a strategy. I only open a trading position if all criteria are met in the market. In addition, one's own experience on the financial markets always influences one's own trading decisions.

So follow the rules step by step or create your own trading plan. Every trader is different in type and has his own trading pattern. I also recommend modifying the following criteria and incorporating your own analyses.

Criteria for the CFD trading strategy:

Time unit D1 (daily chart)
Trend determination
Find zone for entry
Entry signal per candlesticks pattern

Time units

From my experience, it is safest and easiest to apply this CFD trading strategy in the daily chart (D1). Day trading is very difficult for many private traders and requires an enormous amount of professional knowledge. You can also apply the strategy on a smaller time frame, but the indicators used are adapted to the daily chart.

Which time units are used:

This CFD trading strategy works best in the daily chart (D1).
Higher timeframes also have a good hit rate
Smaller timeframes can also be used, but without moving averages to determine the trend.
The smaller the time unit, the more difficult trading becomes.

Trend identification

I use 2 different methods for trend determination: Moving averages with special characteristics and chart formations are used to determine a trend. I will now explain both methods.

Moving averages
Chart formations

Using moving averages for the trend

I use 3 different moving averages to determine the trend. A moving average shows me the average price without swap Exness of a certain period. If the price is above this moving average, the market is in an uptrend and if the price is below the moving average, the market is in a downtrend.

In addition, these moving averages often like to act as support or resistance in the market. The price can turn there with a high probability. The moving averages are used in the periods 20, 60 and 240. These period settings were chosen deliberately. In the points below you will find out why.

Moving averages for trend determination:

Period 20: The average of a month
Period 60: The average of a quarter
Period 240: The average of a year

Thanks to the use of the different moving averages, we have an overview of the short-term, medium-term and long-term trend. Small tip: The short-term moving average can often be neglected.

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Chart formation

This method of trend identification is very effective, but also requires patience most of the time. A trend is not always recognisable. Moreover, trading in sideways phases is also very profitable. Pay attention to the highs and lows of a price. Privot points can also be used as an aid.

For a proper trend, the price must always make a higher high or lower low. As an abbreviation, I use HH (higher high) and LL (lower low) here.

The market first makes a low and then a high. The trend is extended by a higher low and finally the market breaks the old high again with a higher high. It is very important to pay attention to which highs are broken. In practice, however, you will rarely see a clean trend. The market always reacts differently. The general pattern is often recognisable in a different way. Therefore, you should learn to read the charts through exercises.

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