Discover how you can generate the highest returns over the shortest timeframe when Day Trading CFDs.
Today we’ll be looking at several ways to identify the best time frame for you when trading CFDs.
Uncover the secrets to finding your best time frame
Using Multiple time frames when doing your charting analysis is going to be essential to your success as a Day Trader. Maximising your entry will stem from using a short, medium and long term chart to focus on the best entry on your time frame.
As an example you may trade a 15 minute chart, so use a daily chart, 4 hourly chart and then the 15 minute to time your entry. Your challenge initially is to find the 3 charting timeframes that consistently locate winning trades.
How big will your CFD wins be?
The next major component is determining how big your wins need to be compared to your losses and this is referred to as your risk:reward ratio. CFD Day Traders normally have similar size wins to losses and traders need to be careful if the average size of a loss is greater than their wins. In order to be profitable you will need to ensure your percentage win rate is well over 60%.
A good example of a high win percentage are the robots available on the Forex markets like FAP Tubo or Forex Megadroid who suggest 85%-95% win rates. Most high win percentage trading systems have large losses which can devastate the account when they occur.
What you need to concentrate on when Day Trading CFDs
A huge challenge for short term traders is overtrading. Many CFD Day Traders feel the need to be active even when opportunities do not line up offering the best risk:reward. By focusing your efforts on a risk reward ratio of 1.5 to 1 or even 2 to 1 you can build a brilliant edge in the markets that will definitely reward your efforts.
Overtrading is the fastest way to the poor house so avoid this detrimental activity at all costs.