Technical Analysis for CFDs

[d.clerc]

Hi,

I am new to trading CFDs.

I am wondering for trading CFDs using technical analysis do we apply the indicators to the underlying;say,oil futures, to inform decision making or do we just use indicators on the CFDs price charts.

What indicators are most relevant for CFDs on commodities and indices?

Thanks.My apologies if my question is newbish.

 

[malaguti]

Hi,

I am new to trading CFDs.

I am wondering for trading CFDs using technical analysis do we apply the indicators to the underlying;say,oil futures, to inform decision making or do we just use indicators on the CFDs price charts.

What indicators are most relevant for CFDs on commodities and indices?

Thanks.My apologies if my question is newbish.

Hi d, technical analysis isn't specific to an instrument; it could spread betting, shares or in your preferred case CFD. TA can also be applied to the futures or to the cash price, whichever you are trading from as long as you have the data with which to do that analysis.

 

[timsk]

I am wondering for trading CFDs using technical analysis do we apply the indicators to the underlying;say,oil futures, to inform decision making or do we just use indicators on the CFDs price charts.

What indicators are most relevant for CFDs on commodities and indices?

Hi d.clerc,
Further to Malaguti's post above, this Essentials Sticky will fill you in on the basics regarding TA: Essentials Of Technical Analysis. If you're new to trading generally then, IMO, you'd be wise to ease off from jumping into CFDs just yet as they are a sophisticated and highly leveraged derivative product aimed at seasoned traders. To put it another way: it's far, far easier to lose a shed load of money trading CFDs than it is to make any! Take a look at the Trading FAQs in general and, in particular, the first two Stickies linked in my signature below.
Enjoy!
Tim.

 

[d.clerc]

Hi d, technical analysis isn't specific to an instrument; it could spread betting, shares or in your preferred case CFD. TA can also be applied to the futures or to the cash price, whichever you are trading from as long as you have the data with which to do that analysis.

Thanks for your views malaguti.

 

[d.clerc]

Hi d.clerc,
Further to Malaguti's post above, this Essentials Sticky will fill you in on the basics regarding TA: Essentials Of Technical Analysis. If you're new to trading generally then, IMO, you'd be wise to ease off from jumping into CFDs just yet as they are a sophisticated and highly leveraged derivative product aimed at seasoned traders. To put it another way: it's far, far easier to lose a shed load of money trading CFDs than it is to make any! Take a look at the Trading FAQs in general and, in particular, the first two Stickies linked in my signature below.
Enjoy!
Tim.

Appreciate your reply Timsk.

 

[d.clerc]

I have this vexing question still.

When trading CFDs say on futures,do I have to check charts for both the CFD and the future(e.g crude oil) to make an educated prediction?

Thanks in advance.

 

[kalott]

CFDs should follow the underlying or it would be risk for arbitrage?

If you use volume its a problem

Some metatraders providers show volume on the CFDs traded

I dont know why IG and CMC dont show that, it would be a little help anyway?

What i would like to see (IG) is some kind of indicator on the chart showing Client sentiment, trading activity but i dont know if it can be done?

Trade FTSE 100 | FTSE Price | FTSE 100

 

[timsk]

When trading CFDs say on futures,do I have to check charts for both the CFD and the future(e.g crude oil) to make an educated prediction?

Hi d.clerc,
CFDs are merely a financial product, or vehicle if you will, that enables you to trade price movement derived from an underlying instrument - crude oil in your example. These days, most CFD brokers offer direct market access, so you're trading the same spread as a futures trader. In other words, charts of crude oil from CFD brokers should look the same as those provided by futures brokers. The reason being that the data used to build the charts comes from the same source: i.e. the exchange the underlying instrument is listed on. (In the case of crude oil, it's NYMEX, part of the CME Group.)

If you were trading crude oil using a spread betting broker, then their charts might well be different - and the spreads will probably be wider - because the SB broker themselves are on the other side of your trade and set their own prices. Even so, the charts (and prices quoted) are unlikely to be wildly different from the futures and CFD brokers because, theoretically at least and as kalott says, they would risk being exploited by arbitrage traders.
Tim.

 

[d.clerc]

Hi d.clerc,
CFDs are merely a financial product, or vehicle if you will, that enables you to trade price movement derived from an underlying instrument - crude oil in your example. These days, most CFD brokers offer direct market access, so you're trading the same spread as a futures trader. In other words, charts of crude oil from CFD brokers should look the same as those provided by futures brokers. The reason being that the data used to build the charts comes from the same source: i.e. the exchange the underlying instrument is listed on. (In the case of crude oil, it's NYMEX, part of the CME Group.)

If you were trading crude oil using a spread betting broker, then their charts might well be different - and the spreads will probably be wider - because the SB broker themselves are on the other side of your trade and set their own prices. Even so, the charts (and prices quoted) are unlikely to be wildly different from the futures and CFD brokers because, theoretically at least and as kalott says, they would risk being exploited by arbitrage traders.
Tim.

Appreciate your reply Tim!