CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.09% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

The vast majority of retail investor accounts lose money when trading CFDs.
76.09% of retail investor accounts lose money when trading CFDs with this provider.

Which are the Best Indicators for Cryptocurrency CFDs?

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Author: Leon Marshall
Crypto CFDs are all about being able to read the market and predict price movement in order to make profit. In order to make the right moves, you need a trading strategy that works. Currently, three of the best indicators you can use are the Bollinger Bands, the MACD, and the RSI.

Highly competitive, risky and rewarding, cryptocurrencies represent one of the most volatile markets out there. Being able to grasp the fundamentals and learning how the most important indicators work – be they economic, technical, or otherwise – is key to being orientated in trading. Cryptos are no different and trading virtual currency CFDs becomes easier with the right indicators. If you’re unsure of where to start, then perhaps you will find the following three indicators useful in building or improving your current trading strategy.

Bollinger Bands

Simple and asymmetric – three lines make up the BB. In the middle, there is a moving average, caught between two parallel lines above and below. If you’re wondering about the latter, they indicate the average highest and lowest prices respectively.

Using Bollinger Bands, you see the support and resistance levels.

The standard deviation shows the market’s volatility through the closeness of the upper and the lower bands. The closer they are, the more volatile the market is. Often, if you encounter a scissor-like shape forming around the middle on both sides of the indicator, this points to a breakout that is about to start.

Moving Average Convergence/Divergence (MACD)

The MACD is famous for being capable of producing great results for many traders, without the need of other indicators. It is, hence, a preferred option for affiliates sharing their signal, and is also useful for both entry and exit points. Moving Averages are potent in and of themselves, but with the convergence and divergence addition, there is another layer added to the accuracy with which the market can be analyzed.

By calculating the average of overall price action and recent price movements, the lines move up and down, showing how strong the trend is.

Parallel lines indicate divergence and an ongoing trend, while convergence can be observed when the lines cross. Choosing a setting with lower periods can allow the convergence to be clearly visible on the chart even if the trend is not going that strong. However, this can also make it trickier to know when things are going for the better as well. Monitoring the market and determining its movement patterns as a whole could help pick the appropriate settings.

Relative Strength Index (RSI)

Another famous choice for affiliates sharing their signals with others for possible entry points; the RSI measures a trend’s overall strength in levels. Generally, the 30 and 70 are considered the most relevant during a large portion of the time. When the RSI is at 30, the market is oversold – the minimum price has been reached and it is possible that an uptrend will take place very soon. If it starts moving above 30, the market becomes bullish again. At some point, it can reach the 70. Doing so would mean the market is overbought and a downtrend is about to begin. After the RSI is below 70, being bearish is common.

…the RSI measures a trend’s overall strength in levels…