25th September, 2012 Trader Mind

There are different approaches when trading resistance and support levels.

The most classic way is to wait until either line has been broken to enter the trade. It is believe that once a resistance or support line is broken, the price will continue to rise or fall in that direction.

Another traders and specially traders that use leverage, and that trade in shorter terms, would buy in the support and will sell once it reaches the resistance line. Or vice verse, traders will sell on the resistance line and buy back on the support line.

When deciding in what direction to place a short or long trade in a support and resistance lines, this, support and resistance lines shouldnt be used by themselves as indicators.

Support and resistance levels can happen in any trend or sideways trading. Trader should find help from others indicators before entering a support and resistance level. In a downtrend could be more assertive to go short in the resistance because prices tend to favour the general trend line, and any upset or quick break could be possible to the downside rather than the upside.

A common mistake when trading support and resistance is to place to many trades long, short, long, short. If it works twice, it might not work the third time. Support and resistance level have limited time and in many cases tend to give false signals because support and resistance level are not an uniform or regular price level.

Strategy Overview

CFDMaster trading strategies and methods are tailored to help traders who are looking forward to make good returns out of their trades within a reasonable period of time. These strategies are centered in consistency, objectivity and verifiability. They are also developed based on extensive research in order to ensure a trader hits his targets once he employs the CFDMaster strategies and methods.

In most cases, CFDMaster strategies and methods are used in CFDs trading. Here, these strategies allow traders to take full advantage of the leverage to make good profits within a short term and long term basis as well. That is only one of the many reasons why traders are nowadays using the CFDMaster strategies and methods in their daily Contract for Difference (CFD) trading.

On the other hand, CFDMaster trading strategies and methods enable traders to realize the buying of a certain asset while at the same time allowing them to sell another asset as well.

Objectives

The main objective of CFDMaster strategies and methods remains allowing or giving traders the authority to trade without necessarily using a stockbroker and make huge profits even when the markets seems to be falling. These strategies also focuses on letting CFDs traders to trade on margins which means that traders will not need to use the whole value of their shares that they are trading. Instead, the trader will only require paying a certain margin of the value to cover potential losses.

Goals

The CFDmaster goals seeks to guide traders to making profits out of their trading while at the same time avoiding running into losses as much as possible. These strategies are tailored towards finding out the most favorable account capitalization needed in order to realize the highest rates of sustainable income.

Technical analysis is yet another very important goal of CFDmaster trading strategies and methods. The technical analysis helps a lot in the short-term trading.

Markets and Instruments

It is common sense that any trader would like to be involved in a trade or market that will give him some quick and hood returns while at the same time keeping low the risks of running into any losses. And, that is exactly what CFDMaster trading strategies seeks to guide traders into. Out of the various markets available to the trader today, the stock market, in particular, is known worldwide to be a place where any smart trader can literally mint millions of dollars. Other markets include crude oils, precious metals, indices, equity, bonds, currencies and commodities.

The best thing about all the above mentioned markets is the fact that the brokers who are engaged in offering such markets are all licensed and fully regulated by renowned regulators. As a result, you should not worry a thing in regards to your investment provided that you invest in the right market.

The instruments you choose to use in your trade will also have an impact on your end results. Therefore, you ought to be very careful when choosing both the market to trade in as well as the instruments too use. Ava mobile trader is one of the best and most recommended trading instruments. It is convenient as well as easy to use. Ava mobile trader is offered by Avatrade.

Time frame

Understanding the best time to execute a trade is one of the secrets to make it in any trade. A smart trader usually knows the best time that will expose him to very minimal, if any, loses while targeting to make big profits. However, in CFD trading, the time frame aspect will majorly be determined by the exact kind of strategy that a trader is using. There are several strategies. Some will allow a trader to do his trade for one day, others days to weeks and some can actually open the window of trading for up to months.

In most cases, there are three time frames which a stock trader can use depending on the market that he has interests in. They include trend chart, signal chart and timing chart. The secret here is making a very deep analysis and understand which time frame is best for your kind of trade and investment.

In the event that the prices in trend-chart are going up, that is a clear signal that you need to buy the stocks. It is also best for long term investment.

The signal chart, which is the most important, on the other hand guides the trader to identify the best time to either sell or buy stocks.

Best time to buy or sell a stock

On the other hand, the timing chart shows the trader the perfect time to enter or exit the market in order to make good profits because a small delay in trade can cost you a big deal.

But the ultimate goal of each time frame is giving the trader all the time that he needs to make good profits.

Tools

Just as it is the case in doing anything else, a trader will need to have excellent tools of trade in CFds trading too. The tools help a trader to realize his set target within the set period of time. Some are short term while others are long term.

In CFDs trading, Meta Trader 4 passes as the commonly used tool thanks to its efficiency and accuracy as well as ease of use.

This tool comes with a lot of features that are offer traders the much sought after liquidity. Meta Trader 4 is not only flexible but powerful as well in managing CFD strategies and forex trades across the globe.

Before you start

It is evident that there are a lot that you will need to learn and master before get started or before you start CFDs trading. These are rules that will guide you throughout your trading. For instance, you will need to follow the three steps indicated below.

Know your market

You must identify and familiarize yourself with your chosen market first. That is you will need to choose one out of the close to 12,000 markets available today. in order to settle for the best market with you, you have to follow financial news, stock markets, share prices and reporting dates of various companies.

Develop realistic targets

Your trade target must be realistic. Don’t set yourself goals or targets that you know very well that you will not realize. Realistic target will make your trading more fun and motivating. Here, it is also important to create your own rules that will guide your trading. Some rules include your exit point/strategy, the amount of loss you are ready to take, profit goals and the volume of your trade.

Managing your risks

Risks management is one thing that you must understand before you start trading. The best way to do that is to employ the stop losses tactics. You can choose between the guaranteed and standard stop loss orders.

Step by step guide

For you to make it in the CFDs trading, you will definitely need to follow the below indicated step by step guide.

1. Start with a demo account

Before any smart trader takes his money and start trading, he will certainly want to literally test the waters by trading with a demo account which is normally offered by many brokers in the various markets today. That will give a feel of how it feels to trade or work with that particular broker.

2. Open a trading account

You will need to start an account before being allowed to trade. Therefore, opening one is the first step into realizing your dream of CFD trading. This is usually a simple and secure process. Online application is nowadays preferred by many traders. Here, you will only have to fill the already prepared application. Once your account application has been verified and approved, you will receive an account number via your email. In some cases, you might be called on phone.

3. finance your account

Once your account is up and running, you will obviously need to make deposits in order to trade. The amount to deposit will depend on the broker that you chose to work with.

4. Start your CFDs trading

You will be given a go ahead to trade once your deposits reflect in your account and after meeting all the set requirements. To trade, you will have to log in into your account in order to authorize any transactions. However, you must choose the market you want to trade in first.

Your position size

It is paramount for a trader to know and fully understand how to take position in CFDs trading. You position will be determined by a few factors. For instance, in order to take the right position in this trade, you must make your mind on whether you going the long term or short term way.

Risk and money management

Risk and money management is one important aspect in any trade and CFDs trading is not an exemption either. Therefore, mastering the art of risk and money management in this trade is very essential. Seasoned traders usually make very small deposits of their entire trade but still manage to stay top of their game. That is one way of managing risks and money in CFDs trading.

In addition to that, there are several tools that you can use to manage risks that come with CFDs trading. They include stop loss orders. These tools have been tested and found to be very effective in risk management. The stop loss orders are available in two types, namely;

1. Standard stop loss orders

2. Guaranteed stop loss orders

Exit strategies

Once you make your mind to get into CFDs trading, you also ought to have in mind best exit strategy that you will use in the event that things turn out to be what you had thought. However, exit strategies can also be used even when things are good and a trader wants to exit the market and maintain the profits that he has made. When preparing to exit the market you will need to sell your stocks for instance.

If you are in the shares market, there are two main exit strategies. They can however be used even in other markets. Expert traders call them candlestick exit strategies. They include;

1. Shooting star

Here, the prices rises steadily during the day and hits a record high and start to go down again, almost to the point where the prices started. A smart trader knows that that is an indication to start selling his shares.