The Importance of Technical Analysis in CFDs
Investors have thousands of opportunities to trade assets online, and to become successful investors traders must identify trends and be
able to predict the future value of financial assets. The importance of CFD technical analysis is crucial to help streamline these
decisions and determine the optimal trades that meet the overall goals.
In fact, technical analysis is especially important in trading CFDs to be able to forecast movements of the market, given its high volatility.
What is Technical Analysis?
Technical analysis studies the behavior of the market, primarily through the use of graphic tools, market indicators, and reports in order to
predict future trends in the price of an asset. The analysis is based on three basic premises; these assumptions are:
1. The price reflects the overall stability of an asset; there are many elements that affect the market and these are reflected in the share price.
Mainly supply and demand are causing this rise or fall in prices. As a technical analyst, you should not care about the factors
causing changes, but limit your analysis to the consequences
2. Prices move in trends; this is pretty straightforward; prices always move in trends, upward and downward, depending on the circumstances that occur at each moment in the markets. The purpose of technical analysis is to define the trends and prepare to start your trades in that direction.
3.History repeats itself; certain trends in the markets tend to reoccur again and again. It really comes in handy to perform comparisons and examine the past behavior of an asset before deciding what to do with your investment, depending on that asset’s history.
With this style of analysis, a trader will use market trends to predict the price movements of an asset in the future. The purpose of this technique is to estimate the present value of the asset but to determine patterns in the fluctuation of prices, which helps predict future activity. Understanding these models allows traders to identify potential changes in the value of assets, giving them a good indication of the upward or downward trend in the price of the asset. It’s also important to note that technical analysis is performed the same no matter what
the underlying asset you are looking at.
Risk Warning: Trading in financial instruments using financial facilities, such as forward rate agreements, contracts for difference or virtual currencies involves a high level of risk, including the risk of losing all of the trading capital, and trading may not be suitable for all persons. Financial facilities, stock price volatility, and other financial instruments can work in your favour, but they can also work against you. Before you decide to start trading, you should carefully consider your investment objectives, the level of experience you have, and the degree of risk you can accept. We will not take into account your personal circumstances, nor make any recommendation for you to undertake any trading. In the event of uncertainty, you should consult and receive advice from specialist experts outside the Platform, including legal, tax and financial advisors.
Trading with us is subject to our Terms and Conditions and Privacy Policy, including modifications made from time to time. When you open an account on our platform, you accept the said documents and acknowledge that it is a legally binding contract for you duly.
Worldtradecenter is a global brand committed to providing an environment in which you can trade stocks and other financial instruments. If you have any questions, you can always contact our support team via email: support@world-trade-center.io.
Risk Disclaimer
CFDs are complex instruments and involve a high risk of losing money quickly due to the financial facilities.
You should consider whether you understand how CFDs work and whether you can take the high risk of losing your money. The Company is the counter party in your transactions and therefore is the seller when you are buying and the buyer when you are selling.
We highly recommend not investing more money than you can afford to lose to avoid major financial problems in case of losses.
Please be sure to determine the maximum acceptable risk for yourself.
Please be aware that Worldtradecenter is not responsible for the results of your CFD trading. You are solely responsible for your profits or losses. No market information or any educational or analytical material should be considered as trading advice setting out your trading actions, it is only non-binding market information.
Please be aware that Worldtradecenter will not be liable for any errors in quotes and software errors of the trading platform.
We apologize for not accepting traders based in the United States, Cuba, Democratic People’s Republic of Korea (North Korea), Iran and Syria on our platform, and may refuse to accept traders from any other countries at our sole discretion.
