CFD Trading Moving Average System Explained
CFD Trading 20 Pips Moving Average CFD Systems
The 20 pips cfd price range moving average cfd strategy is used with the 1 Hour cfd chart and 15 minute chart. On this cfd chart timeframes we use the 100 and 200 simple moving average cfd technical trading indicator.
Both the 1 Hour and 15 minute chart timeframes will use the 100 and 200 SMA (SMA Indicator) to determine the direction of the CFD trend.
The 1 Hour cfd chart time-frame checks the long term direction of the CFD trend, upward or downward trend, depending on the direction of the moving averages. All cfds trades taken should be in this cfd trend direction.
We then use the 15 minute chart to find the optimal point to enter cfds trades. CFD trades are opened only when the price is within 20 pips range of the 200 simple MA, if cfd price is not within this pip range cfds trades are not opened.
CFD Trading Uptrend/Bullish Market
To generate buy (bullish cfd signals) using the 20 pips moving average CFD Trading strategy, we shall use the 1hour and 15 minute chart timeframe.
On the 1 hour cfd chart timeframe the cfd price of the cfds chart should be above both the 100 and 200 simple moving average. We then move to a lower cfd chart time frame, the 15 minute chart timeframe to generate a cfd trade signal.
On 15 minute chart timeframe, when price reaches the 20 pips range above the 200 SMA, we open a buy cfd trade and place a stop loss 30 pips below the 200 SMA. Stop loss can be adjusted to the amount of Pips that are suitable for your risk but to avoid being stopped out by normal CFD Trading volatility its best to use 30 pips stop loss.
A buy cfd trade can also be opened when the price touches the 100 Simple moving average, provided it’s not very far from the 200 SMA. Normally the 100 SMA will be within the 20 pips range of the 200 SMA.
100 and 200 Simple Moving Average CFD Buy CFD Signal - Moving Average CFD Strategy
CFD Downtrend/Bearish Market
To generate sell (short cfd signals) using the 20 pips moving average CFD Trading strategy, we shall also use the 1 hour cfd chart timeframe and 15 minute chart timeframe.
On the 1 hour cfd chart time frame, the cfd price should be below both the 100 and 200 SMA. We then move to the 15 minute chart timeframe to generate a cfd Signal.
On 15 minute chart, when price reaches the 20 pips range below the 200 SMA, we open a sell cfd trade and place a stop loss 30 pips above the 200 simple moving average.
100 and 200 Simple Moving Average CFD Sell CFD Signal - Moving Average CFD Strategy
With this cfd strategy method cfd price will generally bounce of these support and resistance levels because many traders watch these levels, and open similar cfds trades at around the same point.
These support & resistance levels act as short term resistance or support levels within the cfd price charts.
Profit Taking level For This CFD Strategy
With this cfd strategy the cfd price will bounce & make a move in the direction of the original CFD trend. This move will range from 60 - 70 pips.
The best cfd profit taking level would therefore be considered to be 60 to 70 pips from the 200 SMA.
