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Considering how risky CFD trading is, it is essential to have a sound and consistent trading strategy in place in order to mitigate the risks. There are several CFD strategies that you can use to improve your understanding of financial markets as well as benefit from CFD trading. All the strategies explained here use leverage, meaning you only have a smaller amount of deposit (usually a percentage of full trade value) to gain better exposure to the markets. Let’s go through these strategies one by one.

CFD position trading is just like making an investment- you buy and hold the investment for a long time. In a similar manner, CFD position traders hold their trades for months or sometimes even for years, thereby neglecting all the minor price fluctuations that may occur on a day-to-day basis. In simple terms, position traders tend to focus on long-term price movements and trends. This is quite the opposite of intraday trading, where traders take advantage of everyday price movements. In CFD position trading, traders rely on fundamental indicators like historical price patterns as well as macroeconomic trends rather than technical indicators.

Bottom Line:

Using these CFD trading strategies can help traders to determine the ideal entry and exit price levels for trading CFDs. It is also possible to combine more than two CFD strategies for the best results.