CFD trading is a term for a “difference contract”; it is an agreement between two parties; “Buyer” and “seller”; they agree that the “seller” will pay the difference between the current price and the price at the time of the contract.
The “buyer” will make a profit if the price moves up during the term of the contract; if the price moves down, the buyer will lose his contract money.
CFD trading is common in the financial market; some of the areas of the Forex market and the stock market; other areas of the market are commodity and index markets.
The thinking in this article concerns Forex trading and stocks in connection with CFD trading. The first part is a brief description of the two market areas, and the second part is trade with indicators.
Forex Market
In the last couple of years, the world economy is in a financial crisis, and the crisis has affected prices in the financial world. One of the currency pairs that has been moving mostly is EURUSD; since August 2011 EURUSD has moved from 1.4400 to 1.2200 in July 2012 and the currency pair is still moving strongly. In the first quarter of 2013, EURUSD was bearish from 1.3300 to 1: 2800.
Stock market
The reverse stock market was moving in a different direction; In the United States, the Dow Jones set a historic record in 2013, as the Dow Jones index was the highest since 1913. The reason is that the United States economy has been systematically recovering from the global crisis and has given hope that the United States economy is in the process of recovering.
Trade with indicator
The historical description of stocks and the Forex market shows that the stock market is on the rise and the Forex market, represented by EURUSD, is volatile.
Some traders in the CFD market have decided to trade with indicators. The advantage is that they do not need to know whether the economy is in crisis or recovering, because the indicators they use will decide when they will enter the deal and when they will make a profit in trade.
One indicator is the MACD indicator; it is an indicator that provides information about market trends; the indicator consists of a MACD line and a signal line; a trend change occurs when two lines intersect. The MACD indicator is illustrated in the video at this link.