I received the below question from a viewer of my videos today:
Quote:
Hello!
I saw some of those videos and i am impressed about indicators like MACD, RSI, slow stochastic, bollinger band. I want to ask if we can use those indicators also for CFDs (Contract For Difference), that are very popular here. Becouse some of the "analysing masterminds" say that it cant be used? thx for answers!
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I live in the United States and here firms are not allowed to offer CFD trading so I am not an expert, but I know that this is very popular overseas particularly in the UK where if you trade CFD's you do not pay capital gains tax.
So to get to the question if you are trading CFD's with a reputable broker then the price of the CFD should move in lockstep with the underlying asset which may be an individual stock, an index, or a currency for example. As this is the case with the exception of tools that involve volume (which would have to be derived from the underlying asset to get a true picture of how it may affect price) I don't see any reason why any of the other techincal analysis tools that we have learned about would not work with a CFD.
If there is something that I am missing there then as the prices of the CFD should move in lockstep with the underlying asset, one could simply analyze and make their trading decisions based off of a chart of the underlying asset and then place their trades using the CFD and everything should work out the same.
Hope that helps. If there is any feedback or more questions on this feel free to post it below.
Best,
David