Best Timeframe to Trade CFD

Multiple timeframes analysis equals using 2 chart time-frames to trade CFDs - a shorter one used for trading & a longer one to check CFD trend.

Since it is always good to follow the trend, in Multiple Time Frame Analysis, the longer time-frame gives us the direction of the long-term trend.

If the long-term market direction supports the direction of the smaller chart time-frame then the probability of being profitable is greatly increased. This is because even if you make a mistake the long-term cfd trend will eventually save you. Also if you trade with direction of cfd market, then mostly you will be on the winning side, this is what this analysis is all about.

Remember there's a popular saying by many CFD and stock market investors that says: "The cfd trend is your friend' - never go against the cfd trading market.

There are four different types of CFD traders - all these use different charts to trade as described below.

Examples of how each type of CFDs trader uses multiple CFDs Trading time-frames analysis strategy:

Best Time Frame to Trade CFDs

This group holds onto their trades for only a few minutes. The scalper never holds on to a trade for more than ten minutes. With the objective of making small amounts of pips as profit, 5 - 20 pips.

A Scalper using 1 minute chart wants to go long, checks 5 min chart, which looks like the one below, since 5 minute show cfd trend is going up, then decides from this analysis it is okay to buy.

Best Time Frame to Trade CFDs

Best Time Frame to Trade CFDs

This group holds on to their trades for a few hours but not more than a day. With the objective to make quite a number of pips, 30 - 100 pips.

Day trader trading 15 min chart wants to go long, checks 1 hour chart, which looks like the one below, since 1 hour shows market cfd trend is going up, then decides from this analysis it is okay to buy

Best Timeframe to Trade CFD

Best Timeframe to Trade CFD

This group holds on to their trades for a few days to a week. With the objective to make a large number of pips, 100 - 400 pips.

Swing trader using 1 hour chart wants to go short, checks 4 hour trading chart, which looks like the cfd example explained and illustrated below, since 4 hour shows the cfd trend is going down, then decides from this analysis it is okay to sell.

Best Timeframe to Trade CFD

Best Timeframe to Trade CFD

These are the investors that hold on to their trades for weeks or months. With the objective to make a large number of pips, 300 - 1000 pips.

Position trader using the daily chart wants to short sell, checks weekly chart, weekly looks like the one below, since weekly shows the cfd trend is going down, then decides from this analysis it is okay to sell.

Best Timeframe to Trade CFD

How to Define A CFDs Trading Trend

Using a cfd system has 3 indicators - Moving Average Crossover System, RSI and MACD and uses simple rules to define the trend. The rules are:

Upward trend

Both MAs Moving Up

RSI above 50

MACD Above Centerline

Downwards CFD Trading Trend

Both MAs Moving Down

RSI below 50

MACD Below Centerline

For More explanation about this system read: How to Generate Signals With a CFD System.