Maximum profits in the shortest possible timeframe is generally what most traders are chasing when Day Trading CFDs. My job here will be to assist you in picking the best timeframe for your CFD day Trading goals.
How to choose the right timeframe
If you are to have any sort of success when Day Trading CFDs then you will need to use several timeframes on your charts for ideal entry conditions. Maximising your entry will stem from using a short, medium and long term chart to focus on the best entry on your time frame.
You might decide to trade off an hourly chart and use a daily and 4 hourly chart to help identify your high probability trades. CFD Day Traders need to work hard on finding the most appropriate short, medium and long term setups to ensure their success.
Locking in wins twice the size of your losses
The best traders understand how vital it is to monitor how big their wins are compared to their losses and this is commonly known as the risk and reward ratio. Most short term CFD traders fall into the trap of having a low risk to reward ratio of 1:1 or less.
Traders with a even risk reward ratio of 1 to 1 must win more than 60% of the time in order to achieve a profitable edge. A huge emphasis of late has been the promotion of Forex Robots like Forex Megadroid or FapTurbo which claim win rates in excess of 90%.
Most high win percentage trading systems have large losses which can devastate the account when they occur.
Put your focus here when Day Trading Contacts for Difference
Overtrading is one of the greatest challenges day traders face. If you are sitting in front of the computer, there is always a compulsion to want to be ‘busy’ and begin placing trades that may not meet your entry criteria.
Your focus therefore should be to look for high probability set ups that allow you to ensure your wins are at least equal to or greater than the size of your losses. Overtrading is a serious issue among short term traders and usually only serves to help line the pockets of your broker.