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     mum
Member
Username: mum
Post Number: 165
Registered: 08-2005
Rating: N/A
Votes: 0
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| | Sunday, April 29, 2007 - 04:46 pm: |  
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If I am a short term trader and hold for a few days to weeks, would I not be better off opening a CFD account and have my money sitting in that getting 6% and lower brokerage fees( than in Comsec getting dam all interest and higher brokerage). Am I missing something here. I realize I would be charged interest over night but would I still not be ahead.
Isn't trading CFDs the same as shares. Why do some people give up on it. Is is the leverage that is so dangerous and the market makers stopping you out. If I used a DMA would that improve the situation. I suppose you don't get such a wide range of stock though
I hope Mum is not being dumb here. If I don't ask i'll never know
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hershy
Member
Username: hershy
Post Number: 1981
Registered: 10-2002
Rating: N/A
Votes: 0
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| | Sunday, April 29, 2007 - 08:19 pm: |
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Hi Mum,
If you get hold of a copy of Sunday's age, in the Financial supplement there as a few articles that will answer your question far better than I could.
Also the Smart Investor magazine has an articles about CFDs every month. But Belle, I am happy to lend you my copy of Catherine Davey's book on CFDs.
Then you can always open an account with CMC (you don't have to trade - just deposit some money which you can withdraw after a while) and get their 6 CD set on how to trade CFDs .
Cheers,
Peter
Incredible Charts
now with US Data
- AMEX, NASDAQ and NYSE data
- OTC BB and Pink Sheet stocks
- more than 500 market and sector indices
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"The safest way to double your money is to fold it over and put it back in your pocket."
http://members.optusnet.com.au/~hershy/
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davkell
Member
Username: davkell
Post Number: 500
Registered: 07-2004
Rating: N/A
Votes: 0
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| | Sunday, April 29, 2007 - 09:56 pm: |
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People always say CFD's are 'short term' only, but with the right system you can utilise them longer term. Many systems can pick stock trends that return 20%+pa, so less 8.25% interest and your commission, you would still receive a nice profit at year end.... and that is if you don't hit the 20%+ mark earlier, which is often the case!
PS: Do I get an award or something for 500 posts!!!!!!!
"Trade Your Way To Financial Freedom" - Van K Tharp
"Manage the downside; the upside will take care of itself" - Donald Trump
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ken
Member
Username: ken
Post Number: 453
Registered: 04-2003Rating: N/A
Votes: 0
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| | Sunday, April 29, 2007 - 10:21 pm: |
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Davkell,
CFD trading is different because you can be forced out of a trade by system drawdown, and not get to the 20% target. You have to have a lot of money in the account to be able to treat them as long term.
Regards,
Ken
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msparks
Member
Username: msparks
Post Number: 993
Registered: 10-2004
Rating: N/A
Votes: 0
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| | Sunday, April 29, 2007 - 10:27 pm: |
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definitely not for that advice you just gave mum 
how on earth can you trade cfd's long term, it is a myth,oops, i tell a lie, if you always get off to a good start, and always pick the right direction on entry and don't mind watching while thousands of dollars evaporate before your eyes with your "trendy, wide, long term, stop" on a cfd trade with 10 or 20 to one leverage , yikes
but congratulations Davkell,     are you trading cfd's again ?
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davkell
Member
Username: davkell
Post Number: 501
Registered: 07-2004
Rating: N/A
Votes: 0
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| | Monday, April 30, 2007 - 03:59 pm: |
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Depends, define "trendy, wide, long term stop"! How can it really be any different to actually trading the stock or margin trading the stock? By utilising a trailing stop on an EMA, you might have a bit of a drop from highs if the stop is hit, but if you take trades with a high probability of success as defined by your system, then you should always be stopped out in a profitable situation.
Your system should pick the high probable trades, and for extra safety, you could employ close initial stops and/or pyramid into a trade as it becomes apparent that it is moving in your direction. My analysis shows that you could follow this with CFD's and pull a reasonable profit.
"Trade Your Way To Financial Freedom" - Van K Tharp
"Manage the downside; the upside will take care of itself" - Donald Trump
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support
Moderator
Username: support
Post Number: 15
Registered: 02-2003Rating: N/A
Votes: 0
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| | Monday, July 21, 2008 - 12:55 pm: |
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Query from a member (Ron):
I am looking for private tuition on stocks, shares and CFDs I live on the Gold Coast.
Can anyone help him?
(Message edited by colin_twiggs on July 21, 2008)
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exile7
Member
Username: exile7
Post Number: 2
Registered: 02-2008Rating: N/A
Votes: 0
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| | Thursday, July 31, 2008 - 11:20 am: |
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I was wondering what the underlying actions of a CFD provider are.
If I purchase 500 CFD in say FLX @ 20 bucks. Then what does the CFD provider like CMC/IG Markets do. Do they buy the underlying security on the ASX, borrow it from someone else?
Would my purchase be reflected somehow in the underlying market?
I know they these providers make money from interest they charge clients. But do they make it any other way?
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davkell
Member
Username: davkell
Post Number: 564
Registered: 07-2004
Rating: N/A
Votes: 0
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| | Thursday, July 31, 2008 - 07:50 pm: |
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Exile: There are primarily two types of CFD provides. Market Maker (eg: CMC) or Direct Market Access (DMA) (eg: Marketech).
Market Maker's make their money through interest charges and their spread. Spread being at any time the immediate difference between the buy & sell. Ie: If you buy ABC at 20.00, and immediately sell it, you will sell at 19.97. So an immediate 3cent loss plus any charges.
The DMA model usually means that the prices reflected on your platform are the same as the real market and when you purchase the CFD, the provider actually purchases on the ASX and you should see your trade go through on the ASX. (Sometimes this may not occur as the provider may make a client to client trade!). The DMA model makes money for the provider through interest charges and commissions (and sometimes also the spread).
Hope that answers your question.
Cheers.
"Trade Your Way To Financial Freedom" - Van K Tharp
"Manage the downside; the upside will take care of itself" - Donald Trump
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