Professional CFD traders never consider trading as a difficult task. They always encourage the rookies to master the art of trading as it can secure their financial freedom. To trade the CFD market, a trader needs to follow some basic rules. For instance, they need to trade the market with a robust trading method and follow strict trading disciplines. If you intend to change your life based on the trading profession, try to evaluate the different kinds of trading methods as it will allow you the pick the best trading system.
As a trader, you do have the freedom to trade with any kind of trading method. But to become good at trading, you need to know about the most prominent trading system. Today, we will discuss the top 5 trading strategies used by the pro-CFD traders.
Support and resistance level trading
Trading the support and resistance level is the most basic way to trade the market. Though it is a very simple way to find the buying and selling spot, it is a very effective way. While drawing the support and resistance level, focus on the higher time frame trade signals. If you rely on the lower time frame trade signals, you might trade at the minor support and resistance level. Thus you will not find profitable deals in the market.
Price action trading strategy
Millions of traders are using the Japanese candlestick pattern to find reliable trade signals. Using the candlestick pattern in the trade execution process is known as a price action trading strategy. Once you learn about the basic candlestick pattern, you should be able to take the trades in any time frame. In fact, taking the trades in the lower time frame will be much easier as you can set a tight stop loss. Though it will take some time to learn about the basics of the price action trading system, you do have a demo account which you can use to learn things in a risk-free environment.
Swing trading method
The professional traders who deal with a big trading account usually prefer the swing trading method. If you use the key swings in the CFD market, executing the trades will become much easier. Each swing point act as the major support and resistance level. So, learn to identify the major swings in the market so that you can take better decisions without facing much trouble. But being a swing trader, you have to be patient with the trading process. It’s not like the trading scalping method. To find one good trade, you might have to wait for weeks.
Trend trading strategy
One of the easiest ways to trade the CFD market is to master the trend trading strategy. All you need to do is to learn the use of the trend line tools. Use the trend lines to connect the higher lows or lower lows in the market. While connecting the trend line, make sure you join the key points in a natural way. You may also use the moving average or some advanced indicators to find the overall direction of the trend.
In case you are new to the moving average indicator, you may start with the 100 or 200 periods of moving average. This should give you a decent idea about the existing trend and you should be able to find reliable trade signals. Note that the moving average will also act as strong support and resistance level in the higher time frame.
Fibonacci trading strategy
If you want to use an advanced CFD Trading method, we suggest you learn the Fibonacci trading strategy. The Fibonacci trading strategy is based on the retracement ratio of the trend. So, you are basically taking the trades with the existing trend. However, this system is not a bulletproof way to make a profit. If the price breaches the 618% retracement, you should consider it as a sign of trend reversal. So, trade the market with low risk so that you can withstand the losses.