CDP indicator, also called central point indicator, is a technical analysis tool widely used in financial markets such as stock, futures and foreign exchange. It calculates a series of price points according to the highest price, lowest price and closing price of the previous day to assist investors in making trading decisions. In day trading, CDP index has been widely concerned and applied, because it can help traders grasp market fluctuations more accurately.

Calculation method of CDP index

The calculation method of CDP index is relatively simple, and its main price levels include central point, support level and resistance level. Among them, the center point is equal to the sum of the highest price, lowest price and closing price of the previous day and then divided by 3, and the support level and resistance level are equal to the center point MINUS the difference between the highest price and the lowest price of the previous day and the difference between the highest price and the lowest price of the previous day. Through this calculation, CDP index can automatically calculate different price points at the beginning of each trading day, which provides important reference for investors to trade.

Trading strategy of CDP index

The trading strategy of CDP index is very common in intraday trading, and investors can make their own trading strategies according to different price points. Among them, the most commonly used strategy is to buy or sell at the support level and resistance level, because these prices can often trigger market reversal. Specifically, if the CDP indicator shows that the current market is in a supporting position, you can consider buying, otherwise you can consider selling.

In addition to the above basic trading strategies, CDP indicators can also be combined with other technical analysis tools, such as bollinger bands and moving averages. Through the cooperation of various indicators, investors can improve the success rate and profitability of transactions.

How to use CDP index to trade?

Trading with CDP index requires investors to have certain technical analysis foundation and market experience. The following are the basic steps for trading with CDP indicators:

Prepare data: obtain the market data of the previous day, including the highest price, lowest price and closing price.

Calculate price point: according to the calculation method of CDP index, automatically calculate the central point, support level and resistance level of the day.

Make a trading strategy: make your own buying or selling strategy according to the price tips.

Set stop loss: In order to ensure the safety of investment, it is necessary to set a reasonable stop loss position after entering the market.

Strict operation: you need to keep a clear head at all times in trading and strictly implement your trading strategy and risk control measures.

It should be noted that CDP index can provide investors with important trading reference, but it cannot guarantee the success of investment. Investors need to consider many factors when trading with CDP indicators, such as market trends and market changes. Therefore, investors should be cautious when trading, follow the principle of risk control and avoid risks.

abstract

Day trading is a widely used trading form in financial markets such as stocks, futures and foreign exchange, and it is also one of the most popular trading methods for traders. In day trading, CDP indicator is a very useful technical analysis tool, which can provide investors with important trading reference. Trading with CDP indicators requires investors to have certain technical analysis foundation and market experience, and at the same time, they need to keep a clear head at all times and strictly implement their own trading strategies and risk control measures.