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Dear Readers,
CFD CHARTS
By Daryl Guppy
We have noted before that CFD trading offers many advantages, but also some disadvantages. The CFD market is not the exact underlying market, and this is particularly true when it come to index trading. The divergence between the index activity and the index activity shown by the CFD provider can be substantial.
We have long argued that when you trade CFDs you trade on the CFD provider's terms. That means developing strategies based on the behavior of the index, and then strategies based on the specific behavior of the CFD you are trading. The variation between providers does not mean one is worse than the other or more accurate, or better than the other. It simply means there are different types of opportunity. Good traders will find the provider that offers them the type of opportunity they are comfortable with.
We show below, without comment, three screen shots taken within minutes of each other. Look in particular at the last 60 minuets of trading. Each is a 1 minute chart and each has a 30 and 60 minute EMA. They show the activity of the XJO on Friday August 5 as the market fell. You decide what offers the better trading opportunities.
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Martin Wong
Trading Coach
Investmatic Management, SoHo, Ara Damansara, Selangor DE, Petaling Jaya 47301, Malaysia
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