CMC Markets trading strategies – Trading Strategies

Last Updated on June 9, 2023

Are you a professional trader looking to make the most of volatile financial markets? Look no further than CMC Markets. With over 30 years of experience in the industry, CMC Markets has become a leading provider of online trading services for position traders, momentum traders, and swing traders around the world. But why is having a trading strategy on CMC Markets so important for these types of traders?

From fundamental analysis to video tutorials and price charts, we’ll cover everything you need to know to develop your own effective approach as a day trader, swing trader, or momentum trader. So whether you’re new to online trading or an experienced investor, read on for some valuable insights into how you can make the most of your time on CMC Markets.

Table of contents:

List of CMC Markets Trading Strategies

On this page, we have compiled all the trading strategies (investment strategies) we have published since our start in 2012 (plus relevant trading strategy articles). The page contains 200+ free trading strategies plus articles about indicators and trading strategy-specific articles. We are confident you find a viable investment strategies among all these articles.

Best CMC Markets Trading Strategies

Are you a position trader, momentum trader, or day trader looking for the best trading strategies to use on CMC Markets? As a leading provider of online trading services, CMC Markets offers a wide range of instruments to trade including forex, indices, commodities and shares. To help you get the most out of your trading experience with CMC Markets, here are some of the best trading strategies that you can use based on your preferred trading style. Analyze the price chart and apply the appropriate strategy for your trading style.

Swing Trading Strategies for CMC Markets

Swing trading is a popular strategy used by traders who aim to profit from short-term price movements in the financial instruments market. This strategy involves opening CFD positions that can last from a few days to several weeks. The goal is to capture swings or fluctuations in prices as they occur, using chart analysis and spread betting techniques. Here are some swing trading strategies that you can use on CMC Markets.

Moving Average Strategy: This strategy is one of the most popular short-term trading strategies, and it involves using moving averages as a trading tool to identify trends in the market. You can use different types of moving averages such as simple moving averages (SMA) or exponential moving averages (EMA) depending on your preference. This strategy can also be combined with momentum strategies to create effective CFD trading strategies.
Breakout Strategy: This strategy is commonly used in short-term trading strategies, such as day trading, and also by position traders who rely on identifying key levels of support and resistance before entering a trade. By waiting for prices to break through these levels, position traders can use this approach for position trading.
Trendline Strategy: This strategy involves drawing trendlines on your charts and waiting for prices to bounce off these lines before entering trades. Position traders can use this strategy for position trading, while day traders can also benefit from it as one of their trading tools.

Scalping Strategies for CMC Markets

Scalping is a high-frequency trading strategy that aims to profit from small price movements in the market using CFDs. Traders who use this strategy open and close positions within seconds or minutes based on chart analysis. The spread is an important factor to consider when scalping, as it can affect profitability. This strategy is often used by day traders looking to make quick profits.

Price Action Strategy: This strategy involves using price action patterns such as pin bars, engulfing candles and inside bars to identify potential trades for position traders. It can be applied in various trading styles including day trading and cfd trading strategies.
News Trading Strategy: This strategy involves monitoring economic news releases and taking advantage of volatility that occurs after these releases. Position traders can use price action analysis on the price chart to identify potential trading opportunities during the day.
Scalping with Indicators: This strategy involves using technical indicators such as moving averages, Bollinger Bands and Relative Strength Index (RSI) to identify potential trades for day trading, algorithmic trading, position traders, and momentum trading.

Position Trading Strategies for CMC Markets

Position trading is a long-term CFD strategy that involves holding positions for several months or even years. This strategy aims to profit from major trends in the market by analyzing charts. Here are some position trading strategies that you can use on CMC Markets with a low spread and without worrying about day trading.

Trend Following Strategy: This strategy involves identifying major trends in the market using technical indicators such as moving averages and MACD. Day trading, algorithmic trading, momentum trading, and position traders can also utilize this strategy to make informed decisions.
Value Investing Strategy: This strategy involves identifying undervalued assets and holding them for the long term until their true value is realized. Position traders can also benefit from this approach, while day trading, algorithmic trading, and momentum trading are not recommended.
Growth Investing Strategy: This strategy involves investing in companies with strong growth potential and holding them for the long term. Position traders, day trading, momentum trading, and algorithmic trading can also be applied to this approach.

Understanding CMC Markets: A Comprehensive Overview of the Trading Platform

Types of Accounts Available on CMC Markets

CMC Markets offers a range of account types to suit different trading needs, including CFD trading. The standard account is suitable for most traders and has no minimum deposit requirement. Traders can also access charts to analyze market trends throughout the day and hold positions for as long as they desire. For experienced traders who meet certain criteria, including having a portfolio of over €500,000, professional accounts are available with additional benefits such as lower margin rates and access to a wider range of products.

Features and Functionalities of the Platform

The CMC Markets platform is designed to be user-friendly and intuitive, with powerful tools for both new and experienced traders. One key feature is the next-generation platform, which provides an advanced trading experience with customizable layouts and integrated news feeds from Reuters. Whether you’re a CFD trader looking to capitalize on market momentum or a day trader looking to take a position, our platform has everything you need to succeed.

The platform also offers access to over 10,000 markets, including forex, shares, indices, commodities, treasuries, and cryptocurrencies. Traders can take advantage of up-to-date market analysis and insights from CMC Markets’ team of experts. With the addition of day trading and algorithmic trading, traders can execute trades quickly and efficiently. For those who prefer a news trading strategy, the platform provides access to real-time market news and analysis. Additionally, traders can trade CFDs on a wide range of markets.

How to Navigate the Platform

Navigating the CMC Markets platform is straightforward, whether you are into day trading, algorithmic trading, or news trading strategy. Once you’ve logged in to your account, you’ll see a variety of tabs at the top of the screen that will take you to different sections of the platform, including CFD trading.

One important section is the product library tab where you can browse through all available markets by asset class or region. If you’re a day trader, you can use filters such as momentum to find products that match your trading strategy. For those who hold positions for longer periods, filters like volatility or dividend yield may be more relevant.

Another useful tool for day trading and algorithmic trading is the order ticket which allows you to quickly place trades based on your selected market. With a momentum trading strategy, you can use pre-populated fields to enter your position and set stop-losses or take-profit levels for added risk management.

Hidden Fees

One thing that sets CMC Markets apart from other platforms is its transparent fee structure. There are no hidden fees or charges – everything is clearly displayed upfront so there are no surprises. This makes it an ideal platform for day trading, algorithmic trading, and tracking position and momentum.

The only fees you’ll need to pay for day trading are the spread (the difference between the buy and sell price) and a small commission on certain products such as shares or CFDs. However, these fees are competitive with other platforms in the industry. Algorithmic trading is also available, allowing you to automate your trades and take advantage of market movements. You can open a position with ease and enjoy low fees while maximizing your profits.

Tablet Devices

For day traders who prefer to trade on-the-go and track momentum and positions, CMC Markets offers a mobile app that is available for both iOS and Android devices. The app provides access to all of the same features and functionality as the desktop platform, including real-time market data, news feeds, and customizable charts.

Averages

One useful tool for technical analysis in day trading is moving averages. These can be easily added to your charts within the CMC Markets platform to help position traders identify trends by smoothing out fluctuations in price over a set period of time.

Indicator for CMC Trading Strategies

Technical and fundamental indicators are essential tools in day trading and taking a position on CMC markets. Technical indicators, such as price charts, are used to analyze past market trends and predict future price movements. Fundamental indicators, on the other hand, focus on economic and financial data that affect an asset’s value.

Technical Indicators Used in Trading on CMC Markets

Technical analysis involves using various technical indicators to identify patterns and trends in day-to-day price movement. Some of the commonly used technical indicators in trading on CMC markets include identifying position for potential entry and exit points.

Moving Averages: These are trend-following indicators that smooth out price fluctuations by calculating the average price of an asset over a given period, making them useful for day trading and determining position.
Relative Strength Index (RSI): This momentum indicator measures the strength of an asset’s recent price performance relative to its previous performance, which can be useful for day trading.
Bollinger Bands: These bands consist of three lines that track an asset’s moving average and its standard deviation, making them a useful tool for day trading. They help traders identify potential breakouts or reversals in real-time.
MACD (Moving Average Convergence Divergence): This trend-following momentum indicator shows the relationship between two moving averages of an asset’s price, making it useful for day trading.

Fundamental Indicators Used in Trading on CMC Markets

Fundamental analysis involves examining economic and financial data to determine an asset’s intrinsic value for day traders. Some of the commonly used fundamental indicators in day trading on CMC markets include:

Economic Data: This includes GDP growth rates, inflation rates, employment figures, and interest rates. Positive economic data can lead to higher demand for a currency or stock, while negative data can lead to lower demand in day trading.
Company Earnings Reports: These reports detail a company’s revenue, expenses, profits, and losses. Strong earnings reports can lead to increased demand for a company’s stock, which is beneficial for day trading.
News Events: Significant news events such as political developments or natural disasters can have a significant impact on market sentiment and prices, especially for those who engage in day trading.

How to Use Indicators Effectively

Using technical and fundamental indicators effectively requires a combination of knowledge, experience, and discipline. Here are some tips for using indicators effectively on a day-to-day basis:

Understand the Indicator: Before using an indicator, take the time to understand how it works and what it measures in your day-to-day activities.
Combine Indicators: Using multiple indicators can help confirm signals and reduce false positives in day trading.
Use Day Risk Management Strategies: Always use stop-loss orders and position sizing to manage risk during the day.
Backtest Your Strategy: Test your strategy on historical data to see how it performs in different market conditions of the day.
Be Patient: Trading is a long-term game. Don’t expect overnight success or get discouraged by short-term losses during the day.

Risk Management Strategies: Safeguarding Capital and Maximizing Profits on CMC Markets

Stop-loss orders as a risk management tool

Stop-loss orders are one of the most popular risk management tools used in the financial market. It is an order that closes out a trade when the price of an asset reaches a specific level within the day. This tool can help investors to protect their profits or limit losses, especially during high volatility periods.

For instance, if you buy stocks at $100 and set a stop-loss order at $90, your position will be automatically closed if the stock price falls to $90. This way, you can prevent further losses beyond your predetermined threshold.

Hedging strategies to minimize risks

Hedging is another common strategy used by traders to minimize risks. It involves taking an opposite position in a related asset class or security to offset potential losses in another investment.

For example, if you own shares of a company in the automobile industry and you are concerned about potential market downturns affecting its value, you could hedge your position by buying put options on an index that tracks automobile manufacturers’ stocks. If the stock price goes down, your put option will increase in value, offsetting some of the losses from your shares.

The importance of diversification in managing risks

Diversification is crucial for any investor who wants to manage their risks effectively. By spreading investments across different asset classes, sectors, and geographies, investors can reduce their portfolio’s overall risk exposure.

Investors can diversify their portfolios by investing in various assets such as stocks, bonds, commodities or currencies. They can also invest across different industries like technology or healthcare. They may consider investing globally across various economies with varying levels of economic development.

Moreover, within each asset class or sector investors should aim for diversity too. For example; within equities investors should look at different sized companies (large-cap vs small-cap), different regions, and different sectors.

Momentum Trading Strategies

Momentum trading is a popular strategy among traders who aim to take advantage of price trends and movements in the market. It involves buying or selling assets that are showing strong upward or downward momentum, with the expectation that the trend will continue for some time.

Definition and Explanation of Momentum Trading

Momentum trading is a strategy based on the idea that assets that have performed well in the past will continue to perform well in the future. Traders who use this strategy look for stocks or other assets that are experiencing strong upward or downward trends and try to capitalize on those trends by buying or selling at opportune times.

There are several different types of momentum trading strategies, including position trading, swing trading, and day trading. Position traders hold positions for weeks or months at a time, while swing traders typically hold positions for several days. Day traders buy and sell assets within a single day.

Examples of Momentum Trading Strategies on CMC Markets

CMC Markets offers a range of tools and resources for momentum traders, including advanced charting software and real-time news feeds. Some popular momentum trading strategies include:

Breakout Trading: This strategy involves identifying key levels of support and resistance on a chart and waiting for an asset’s price to break through one of these levels before entering a trade.
Trend Following: This strategy involves identifying assets that are trending strongly in one direction and entering trades in the same direction as the trend.
News Trading: This strategy involves monitoring news events that could impact an asset’s price and entering trades based on how you believe those events will affect the market.

How to Identify Momentum Opportunities Using Technical Analysis

Technical analysis is a key tool used by momentum traders to identify potential opportunities in the market. There are several indicators commonly used by traders when analyzing price trends, including moving averages, relative strength index (RSI), and the MACD.

Moving averages are used to identify the overall direction of a trend. Traders typically look for assets whose price is above their moving average as a sign of an upward trend, or below their moving average as a sign of a downward trend.

The RSI is used to measure the strength of an asset’s price movement. Traders typically look for assets with an RSI above 70 as a sign that the asset is overbought and due for a correction, or below 30 as a sign that the asset is oversold and due for a rebound.

The MACD is used to identify changes in momentum. Traders typically look for assets whose MACD line has crossed above its signal line as a sign of an upward trend, or below its signal line as a sign of a downward trend.

Developing a Trading Plan: Structuring Your Approach for Consistency on CMC Markets

Trading on CMC Markets can be both exciting and profitable. However, it can also be risky if you don’t have a solid trading plan in place. A trading plan is crucial to your success as a trader as it helps you approach trading with discipline and consistency.

Why having a plan is important when trading on CMC Markets

Developing a trading plan is essential because it helps you stay focused and disciplined while making trades. Without a plan, traders tend to make impulsive decisions based on emotions rather than logic and analysis. A well-structured trading plan provides direction for your trades, allowing you to make informed decisions based on market conditions rather than emotions.

A good trading plan also helps you manage risk effectively by setting clear entry and exit points for each trade. This ensures that you are not caught off guard by sudden price movements or market volatility.

Elements that should be included in your plan

A comprehensive trading plan includes several key elements:

1) Strategy

Your strategy outlines how you will approach the market, including which currency pairs or assets you will trade, what indicators or tools you will use to analyze the market, and what type of trades (long-term vs short-term) you will make.

2) Risk management

Risk management is an essential component of any successful trading strategy. Your risk management plan should outline how much capital you are willing to risk per trade, how many trades you are willing to take at once, and what stop-loss levels you will set to limit potential losses.

3) Trading tools

There are many different types of tools available to traders today – from algorithmic trading software to technical analysis charts. Your trading plan should outline which tools you will use to analyze the market and execute trades.

4) Trading account

Your trading account is where you will execute your trades. Your trading plan should outline the type of account you will open, how much capital you will deposit, and what fees or commissions you can expect to pay.

Tips for sticking to your plan

Developing a trading plan is one thing – sticking to it is another. Here are some tips for staying disciplined and consistent with your approach:

Set clear goals: Define specific goals for each trade and track your progress towards these goals.
Stay organized: Keep a detailed record of all your trades and review them regularly to identify areas for improvement.
Avoid emotional trading: Stick to your strategy and avoid making impulsive decisions based on emotions or market hype.
Stay informed: Keep up-to-date with market news and events that could impact your trades.
Continuously improve: Regularly review and adjust your trading plan as needed to reflect changes in the market or your own experience.

Conclusion: CMC Market Trading Strategies

In conclusion, mastering CMC Markets trading strategies is crucial for anyone looking to succeed in the financial markets. By understanding the platform and utilizing indicators and risk management strategies, you can safeguard your capital and maximize profits. Momentum trading strategies are also a powerful tool for traders on CMC Markets.

Developing a solid trading plan is essential for consistency on the platform. With a clear approach in place, you can stay focused on your goals and avoid making impulsive decisions.

To achieve success with CMC Markets trading, it’s important to stay up-to-date with market news and trends. This will help you make informed decisions about your trades.

Don’t forget that practice makes perfect! Take advantage of demo accounts to test out new strategies before committing real money.

Overall, by utilizing these various strategies and maintaining discipline in your approach, you can increase your chances of success on CMC Markets.

FAQs

1. What should I do if I’m new to CMC Markets?

If you’re new to CMC Markets, it’s important to start by familiarizing yourself with the platform. Take advantage of educational resources provided by the company and consider using a demo account to practice trading without risking real money.

2. How do I choose which indicators to use?

Choosing which indicators to use depends on your individual trading style and preferences. It’s important to research different types of indicators and experiment with them in order to find what works best for you.

3. How much risk should I be taking when trading on CMC Markets?

The amount of risk you take when trading on CMC Markets should depend on your personal risk tolerance as well as the specific trade you’re considering. Utilizing proper risk management techniques can help minimize potential losses.

4. Can I make consistent profits using momentum trading strategies?

While no strategy guarantees consistent profits, momentum trading has been shown to be effective for many traders on CMC Markets. It’s important to thoroughly research and understand the strategy before implementing it in your own trading.

5. How often should I review and adjust my trading plan?

It’s a good idea to regularly review and adjust your trading plan in order to stay on track with your goals and adapt to changing market conditions. However, it’s also important not to make changes too frequently or impulsively. Consider setting specific intervals for reviewing and adjusting your plan, such as once per month or quarter.

6. What are some common mistakes traders make on CMC Markets?

Common mistakes made by traders on CMC Markets include overtrading, failing to utilize risk management techniques, and making emotional decisions rather than sticking to a solid trading plan.

7. How can I stay informed about market news and trends?

There are many resources available for staying informed about market news and trends, including financial news websites, social media accounts of reputable analysts, and newsletters from financial institutions. It’s important to use multiple sources of information in order to get a well-rounded view of the markets.