Beginners tips to use the technical indicators in the CFD market

The number of active traders in the CFD trading industry is rising every day. People are getting attracted to the CFD trading profession and trying to earn more money by taking smart steps. But sadly, very few people manage to make regular profit in the retail market. Most people quit trading after trying for few months. Some traders stick to retail trading for years and eventually leave the investment business. So, why the success rate is so low? The answer is simple. People don’t spend enough time educating themselves properly.

Technical indicators are the most used tools in the retail trading business. But if you ask a trader about the functions of a certain indicator, he will fail to give you the correct answer. So, we are going to give you some beginner tips that will allow you to use the indicators smartly.

Get a demo account

Before you start learning about the technical indicators, you need to learn about the market movement. For that, you have to get a professional demo account. Without using the demo account, you will never know what it feels like to assess the price change in a market. It might be tough at the initial stage but once you become good at this, you will be thinking that you can become the best trader in the world. But this is nothing but daydreaming. It will only help you to understand the functions of the indicators better.

Study the basic indicator

After learning about the basic price movement in the CFD market, you should focus on the use of basic indicators. See, how the indicator value changes based on the market volatility. Try to relate the indicator reading with the price change of a certain asset. This should give you a better idea about the potential trading zone. Feel free to get more info about the basic indicator at Saxo. You may also use their free articles to develop your basic trading knowledge. While studying the basic indicator, you may feel the urge to trade with real money. But control this urge by any means or be prepared to blow up the trading account.

Use moving average

Professional traders greatly rely on the moving average to find the trend. Since the trend trading method is a very effective way to make money in the online trading world, we strongly recommend that you learn to find the existing trend with the help of the moving average. It might be tough at the initial stage but you can experiment with different kinds of moving averages in the paper trading account. Try to set the period of the moving average to 100 to assess the trend direction. A rising moving average indicates a bullish trend and a falling moving average suggests the market is going down.

Changing the value

At times, you have to change the value in the moving average or other indicators. After modifying the default settings in an indicator, you must back-test the performance of the system in the practice account. Without back-testing the new indicator, you should never consider it as a filter tool. And do not alter too many variable settings in the indicator as you might mess things up. In fact, for the first few months, you should be using the indicator with the default settings. Only then you can expect to make progress in real-life trading.

Use less indicator

Less is more in the trading profession. You should not be using too many indicators in the market. If you rely on too many tools and indicators, you are going to mess things up. You will never learn the proper functions of any single tool. Integrate one-two indicator with your trading system. If you intend to use more than 2 indicators, we strongly recommend that you give a second thought about such actions. Never think a complex trading system is going to make you rich. Stick to simple trading techniques and be a confident trader.