A mistake many investors make is that the longest time frame they will look at when it comes to technical analysis is the daily chart. However this chart doesn't always tell the whole story and in a lot of cases it's a lot more profitable to invest in shares based on what the weekly or monthly charts are saying. One of the best set of indicators you can use are the exponential moving averages. I personally like to plot the 5, 20, 50 and 200 period EMAs on my charts because they are extremely useful indicators. They work well on the daily charts but they are even more dependable on the weekly or monthly charts. The key is to look for important EMA crossovers for a change in trend. After you get one of these crossovers you will often see the price continue to move in this direction for several weeks or months before it reverses and crosses in the opposite direction. In the meantime you can bank some significant profits. You can use the EMA (20) crossing the EMA (50) as a good signal but I personally prefer using the EMA (5) crossing the EMA (20) as my preferred signal. As I say this works well on the daily chart alone but when you increase the time frame, you get far bigger price moves. In fact sometimes you can catch a trend that lasts several years and creates substantial profits. You can also use the downwards crossover as either a sell signal or as an opportunity to go short of a stock. For instance if you look at the monthly chart of any of the banks, let's take Royal Bank of Scotland as an example, you will see that the EMA (5) crossed downwards through the EMA (20) in July 2007 and still hasn't crossed back upwards. In this time the share price has fallen from around 600p to just 20p. So obviously a very profitable long-term short position and it's the same with many other companies, not just the banks. If you look at the daily charts, however, you will see that there are a lot more crossovers using the same period EMAs so you don't always capture these big gains using this time frame. If the weekly or monthly chart is too long a time frame to use, then you should use them to identify the longer term trend if nothing else. For instance if the weekly or monthly chart is trending upwards, then you should look for buying opportunities on the daily chart. The point is that you should always have a look at the weekly and monthly charts because they can provide you with some invaluable information (and trading opportunities). The trends on these longer term time frames can last for months, and even years in some cases.
Everybody starts out in CFD Trading wanting to make money but a whopping 95% of Traders lose, which leaves 5% winners. So what is it that the 5% of CFD Traders are doing to make them win in CFD Trading. What are the mistakes that the 95% of people are making, and how can you avoid them!One of the major reasons that so many people lose when it comes to CFD trading is that they believe they have a sure fire winning CFD trading system or CFD robot that is going to make them rich. The first thing to take from this is that making money from CFD Trading is not easy, and it does take some skill.Think about this for minute if it was so easy to win, everybody would be CFD Trading and if a Robot was so successful would you in fact sell that robot? Probably not! More often than not people that develop these CFD Robots sell them and this is how they generate their income and not from CFD FX REPORT. So be very careful when it comes to buying a CFD Robot especially off the back of all the claims they make.The second group just don't understand the unique skills you need to win and they have the following misconceptions:If they work hard they will win but effort counts for nothing in CFD trading, just being right does and this means you have to work smart - not hard.Some people believe that they need to have a highly complicated trading system to be successful, however the opposite is more likely, the less complicated the better.Another portion of this group, believes the myths that can be found all on internet which include:- Scalping and day trading is a way to make massive money- You can predict CFD markets in advance- Buy low sell high is a great way to make money- CFD markets move to science and a mathematical theoryThere are many more and the above are just a few myths.This group wants to put in effort but they do so in the wrong areas and lose, because they simply get the wrong CFD education.How to be successfulTo learn to trade CFD is easy anyone can learn a logical robust system that can make gains but that is not all you need for success - you need the right mindset to apply it and this means trading with discipline. It is not just matter following these systems.Discipline is the key to success and you have to understand that you will have losing streaks, so you must stick to your rules and trading plans.Discipline comes from the right CFD education and having confidence in your trading plan. For further educational information feel free to visit the CFD FX REPORT, as they have a lot of educational information and can help you find the best CFD Broker.To be a successful CFD Trader you don't have to just work hard, work smarter, use simple systems and have discipline.
