CFD Analysis is Based on 3 Factors Common in the CFD Market:

1. CFDs Price Moves in Trends

Cfd price movements follow trends. This means that after a trend has been established, the future market price movement is more likely to be in same direction as the cfd trend than to be against it. Most cfd strategies are based on this technical analysis concept - cfd trend trading.

2. Price Movement Discounts Everything

Cfds trading analysis only considers price movement & assumes that, at any given time, price reflects everything which has or could affect the cfd trading instrument including even the fundamental factors. This only leaves the study of price, which is a product of the supply & demand for a particular cfd in the market.

3. History Tends to Repeat Itself

History repeats itself mainly in terms of price movement. Repetitive nature of market movements is attributed to cfd traders investor psychology: in other words, cfd trade participants tend to provide a consistent reaction to the cfd market most of the time. Cfds trading analysis uses chart patterns to analyze these price movements. Although these cfd charts represent historical data they are still relevant because they illustrate cfd chart patterns that often repeat themselves.

List of All CFDs Indicators - CFD Analysis Explained Tutorial - CFD Analysis PDF

Understanding this technical analysis of the market can be a valuable cfd tool in determining the cfd trend of any market and assisting with entry and exit levels for your trades.

The goal of these cfd technical analysis methods is to help cfd traders determine when the cfd market is trending, & when it's not. If the cfd is moving in one particular direction, then we want to be on board. If the cfd trading instrument is not moving in a particular direction, all you are going to do is lose money as you will get whipsawed around and this is not what we want as cfd investors.

Unfortunately, many traders fight the cfd trend and buy or sell in the opposite direction of a this trend direction, trying to pick a top or a market bottom, only to see the cfd market move further in direction of the trend.

Another common mistake cfd traders often make is adding on to a losing cfd position, averaging a loss. This is not a good cfd strategy especially in a strongly trending market. It is something which experienced investors never do. The cfd trend is your friend, never go against it.

This technical analysis studies alert investors of cfd setups and there are no certainties in financial market. Profits come from using proven cfd strategies and cfd methods to find a trending cfds and taking trades in the same direction of the trend.

With so many cfd investors using similar cfd tools, cfd technical analysis can become a self fulfilling prophecy. If many cfd investors use the same levels as a buying point, the price goes up as everyone will make similar technical analysis moves. However, the question is always how long these cfd moves will last?

Understanding this technical analysis methods will give the charts some meaning when you look at them and apply technical analysis. Cfds trading analysis will help you understand why certain price movements occurred.

Cfds trading charts are used with technical indicators to look for chart patterns which have occurred in past under certain conditions. When these conditions are noted again, you can use the past chart patterns studies to make a buy or sell decision.

Learn CFDs Analysis Guide

• Moving Averages Indicator
• Relative Strength Index Indicator
• Stochastic Oscillator Indicator
• MACD Indicator
• Fibonacci Retracement Indicator
• Bollinger Bands Indicator

Most technical indicators are shown separately from the chart usually below it. This is because these indicators often use a different scale than that of the price chart.

Some of the indicators are shown on the price chart itself, such as Moving Averages and Bollinger bands - these indicators are referred to as price overlays.

Explanation of these indicators is found under the tutorial: List of All CFDs Indicators - CFD Analysis Trading Guide - Learn CFD Analysis PDF - CFD Analysis Examples

SUMMARY

1. CFD Analysis Relies on Defining Probabilities
2. CFD Analysis Uses History of CFD Price Patterns
3. CFD Analysis Uses Several Analytical Tools (Indicators)
4. CFD Analysis Uses CFDs Chart Patterns

Learn CFDs Analysis Guide

Most traders prefer technical analysis - learning the cfd technical analysis methods also takes time to learn due to its nature which involves abiding by the cfd technical rules.

To learn how to trade cfd successfully, it is important that you understand the 3 strategies, outlined below:

1. CFD Trading moves will always follow a trend which can be identified by looking at the chart patterns or the cfd candlesticks charts. If any cfd investor tells you that you can also profit from the counter-trends consistently it will not be possible because the cfd trend is the only proven method of making money in the market.

2. The market forces will drive the cfd prices up or down depending on supply and demand. Cfds trading analysis seeks to measure the demand supply of a cfd trading instrument using various technical analysis tools & cfd indicators. The demand supply is reflected in the price action. Therefore, by simply looking at the price movements themselves you can try and predict what direction the price is likely to move towards using one or two cfd technical indicators - cfd technical analysis indicators like the moving average or support and resistance levels indicators.

3. The cfd market not only shows the history of the past prices, but will also follow the cfd trend that was in place, until its trend direction reverses. Some very important indicators used to determine these cfd market movements are Moving Averages, MACD and Bollinger Bands CFDs Indicators.

When cfd price starts to consolidate, which means there is no cfd trend, you should use a different approach to analyze the market. You should use support and resistance levels and breakout cfd strategies to analyze the ranging market prices.

When the cfd market retraces, you should use cfd chart patterns & cfd technical indicators to analyze whether the current trend will continue or reverse.