Understanding Online CFD Trading Strategies And Different Trading Styles


Many of you already know that online CFD trading has become a popular trend and that more and more people are trying their luck with it. But, is this really a viable way to earn an income?

It could be, if you know what you are doing. Just like with every business, you need to learn what the market is all about and build your skills. Therefore, in order to help all who are thinking about venturing into this opportunity, we will talk about different strategies used by the CFD traders with the aim of achieving good profits on the trades they make.

Though there are several online CFD trading approaches which you can use to open CFD trades we will define here some of the most common online trading strategies here with the goals, timeframe, risk level and other information mentioned for each of them. Let us have a look.

Going long on CFD trading strategy

– What is Goal: To achieve profit from buying low and then selling high

– Trading Strategy – Suppose you buy asset at $10 and sell at 11

– Timeframe – All

– Good for – Traders of all type experience levels

– Level of risk – Low risk

Going Short on CFDs

– What is Goal: To achieve profit from selling low and buying high

– Trading Strategy – Suppose you sell an asset at $11 and buy at $10

– Timeframe – All

– Good for – traders who have experience in short selling

– Level of risk – Medium

Short term trading on CFDs

– What is Goal: Taking the advantage of short term fluctuations in the market of underlying assets. It can range from days to some months.

– Trading Strategy – Identifying short term trends and enabling profits in days or months

– Timeframe – Days to months

– Good for – All traders

– Level of risk – Medium

Swing trading

– What is Goal: Taking the advantage of small swings in the underlying market. This is one of the most popular strategies for CFD trading at https://www.xtrade.com/.

– Trading Strategy – Use an indicator to identify the turning point, wait for confirmation and jump on the new move.

– Timeframe – 1 – 20 days

– Good for – All types of short and medium term traders who are confident with the use of  stop losses

– Level of risk – Medium

Intra day

– Trading Strategy – Identify the stocks with good daily range and trade on them.

– What is Goal: Taking the advantage of the movement of prices within one CFD trading day and closing the position before the close of the market in a day.

– Timeframe – Same trading day

– Good for – Fast and experienced traders who are smart and have knowledge on the online CFD trading platforms

– Level of risk – High due to small movements and high capital is required to take the advantage of the short movements.

News Trading CFDs

– Goal – To make profits on the fluctuations in the prices due to release of major News affecting that.

– Trading Strategy – Monitor News in papers and websites and trade on the News affecting the movement of the underlying assets.

– Good For – Experienced traders who have good News feed available for them

– Timeframe – From minutes to days

– Level of risk – High


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