Very hard.
I am trying my hands with index CFDs with small coin and am finding that while plenty of my trades earn me a profit in the cents, some make losses in dollars wiping out the profits and putting me in the red.
Would be glad if some of the more experienced hands here could help a newbie. Any references to literature would be great.
I have tried using many of the indicators used for stocks such as stochastics, MACD, RSI as well as trying to identify support, resistance and trend lines to work out where the index is going but it has been very tricky:
1. Firstly, choosing the appropriate interval over which to base the indicator. Depending on the time frame chosen, mixed signals are generated. I wonder what time-frames other traders use to work out direction. I am trying to use the five minute interval to check the overall direction of market and then looking at one minute charts to identify divergences. Am having mixed results with this
2. I am not finding the stochastic or RSI indicator very useful on the 1 minute charts to determine what positions to take. I am not finding them very useful. I have had better results by using MACD crossovers and looking at the extent of the divergence to work out which positions to take. Wonder what indicators others use. Is there one indicator which works better in a particular situation?
3. I don't know whether to follow a strategy of trade and forget or to keep peeping at the screen. With the volatility of the index, if the screen is stared at for too long, I take profits too early. However if I set a stop and forget about it, I find that I have been stopped out even though the market at one point moved in my direction.
Would appreciate any help from any of ya index trading honchos!
Thanks!
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