CFD and Technical Analysis Q

[chode84]

Just wondering if anyone can tell me what the reasons are behind CFD brokers charging commission on equities but not on other instruments?

Also when trading indices, can the traditional technical analysis techniques be applied the same as when trading a stock?

Many thanks.

Chode

 

[NAsX]

With things such as forex and indices, they make their buck from the spread. Eg. they may quote EURUSD as 1.3970/1.3973, so you would buy at 1.3973 and sell at 1.3970, they then profit from the 3pipi spread.

Personally, I find they are pretty much the same thing, TA on indicies and equities, but others may have a different view.

Good trading!

 

[sammy84]

Also when trading indices, can the traditional technical analysis techniques be applied the same as when trading a stock?

Depends what indices. Some say the currency market is harder to manipulate, hence it serves itself better to T/A.

 

[Trembling Hand]

Depends what indices. Some say the currency market is harder to manipulate, hence it serves itself better to T/A.

 

[chode84]

Thanks for your replies!

Not so much concerned with currencies but with the ASX200 and UK100.

 

[sammy84]

Sorry to explain in more detail. Forex has a bigger market pool, therefore only larger players can manipulate its movements. Nevertheless it still can be manipulated, however not as easy as a stock on the ASX for e.g. I dont know what your trying to catch me out on....

 

[Trembling Hand]

Sorry to explain in more detail. Forex has a bigger market pool, therefore only larger players can manipulate its movements. Nevertheless it still can be manipulated, however not as easy as a stock on the ASX for e.g. I dont know what your trying to catch me out on....

LOL.

So when the the big boyz decide to manipulate a stock what would they be up to??


Accumulate at lows and distribute at a higher price (if playing longs). And what will be in between these two states? a trend. So tell me how TA will not work as well?

The logic

 

[sammy84]

LOL.

So when the the big boyz decide to manipulate a stock what would they be up to??


Accumulate at lows and distribute at a higher price (if playing longs). And what will be in between these two states? a trend. So tell me how TA will not work as well?

The logic

Creating up/down-thrusts in order to sell off holdings at a higher price, is just one of the many ways a price can be manipulated. Might not even be a manipulation. The slippage I have received from trading many well watched patterns, that occurred purely because too many people traded a break, this happens less in liquid markets. I'm not say TA does not work, just point out that it can less efficient. Btw I dont trade forex, or indicie as a matter of fact, I stick to shares because they have their advantages too.

 

[Trembling Hand]

The slippage I have received from trading many well watched patterns, that occurred purely because too many people traded a break, this happens less in liquid markets.

Well that comment just confirms that you haven't traded more liquid markets. Going with "well watched patterns" in futs or FX will have you cut to bits. Its not manipulation mate its how a zero sum game works.

To add there is a lot in your comment. Wonder how many will take the wisdom from it & how many will just settle for blaming manipulation. :frosty::star: