CFDs Retracement Trading

How Do You Use Trading CFD Fibonacci in CFD?

A good cfd retracement strategy to use is the fibonacci retracement indicator. Fibonacci retracement indicator is used by many cfd traders as a cfd retracement strategy indicator tool.

The fibonacci retracement indicator is placed on a cfd chart and this CFDs Fibonacci Retracement indicator then calculates the retracement levels on the cfds charts.

CFDs Fibonacci Retracement Strategy Examples on Upward CFDs Trend and Downwards CFDs Trend

CFDs Retracement Strategy

In the CFD Retracement Strategy example shown below the cfds price is moving up between chart point 1 & chart point 2 then after chart point 2 it retraces down to 50.0% retracement level then cfds price continues moving up in the original upward cfds trend. Note that this cfd retracement technical indicator is drawn from point 1 to point 2 in direction of the cfd trend (Upwards Direction).

Because we know this is just a retracement based on our cfd chart cfd trend - using this retracement indicator, we put a buy order just between the levels 38.2% and 50.0% & our stoploss just below 61.8% pull back mark. If you had put a buy at this point in trade example shown below you would have made a lot of pips after the cfds price retracement reached the Fibonacci 50.0% level and then continued moving in the original upward cfds trend.

How to Trade Retracement on Upwards CFD Trend - CFD Retracement Strategy

Explanation for the Above CFDs Retracement Strategy Example

Once the cfds price hit the 50.0% retracement level, this retracement level provided a lot of support for cfds price, & afterward cfd market then resumed the original upwards cfd trend and continued to move upward.

23.60% retracement level provides minimum support and isn't an ideal place to set a cfds trading order.

38.20% retracement level provides some support but cfds price in this example continued to retrace upto the 50% zone.

50.00% retracement level provides a lot of support and in this example, this was the ideal place to set a buy cfds trading order.

For this CFD Retracement Strategy example, the cfds price retracement reached the 50.0% retracement level, but most of the time the cfd market will retrace up to 38.2% retracement level and therefore most of the time cfd traders set their buy limit cfd orders at the 38.2% Fibonacci retracement level, while at the same time placing a stop just below 61.8% Fibonacci retracement level.

CFDs Retracement Strategy

In the CFD Retracement Strategy example shown below the cfd market is heading downwards between chart point 1 and chart point 2, then after chart point 2 the cfds price then retraces up to 38.2% retracement level then it continues heading downwards in the original downwards cfds trend. Note that this cfd retracement technical indicator is drawn from point 1 to point 2 in direction of the cfd trend (Downwards Direction).

Because we know this is just a retracement based on the cfds chart cfd trend we put a sell order at 38.2% retracement level and a stop loss just above 61.8% retracement level.

If you had put sell order at the 38.2% retracement level as shown on the trade below you would have made a lot of pips afterwards after the cfds price reached the 38.2% retracement level and then resumed the downward cfds trend.

In this trade the retracement of cfds price reached 38.2% retracement level & did not get to 50.00% retracement level. It is always good to use 38.20% retracement level because most times the cfds price retracement doesn't always get to 50.00% retracement level.

How to Trade Retracement on Downwards CFD Trend - CFD Retracement Strategy

Explanation for the Above CFDs Retracement Strategy Example

The above CFD Retracement Strategy examples is a cfd retracement trading setup where the cfds price retraces immediately after touching the 38.20% CFDs Fibonacci Retracement Level.

This CFD Retracement level provided a lot of resistance for the cfds price retracement, this was the best place for a trader to set a sell limit cfd order as the cfd market quickly moved down after hitting this retracement level.