CFDs anyone?

[professor_frink]

Re: CFD's anyone?

it's more than likely that you will lose all your money if you try that unless you have some unbelievable trading skills.
You actually need 4 wins for every loss to come out ahead.
four 1 point wins= 4 points
one 3 point loss= 3 points.
4 out of every 5 trades needs to be profitable for you to come out ahead.
that's assuming that you can always get out at the point you want to.

What happens when the market moves against you quickly and a stop blows out. You won't get out exactly at your stop everytime, and that will just help to kill you off quickly. And what will happen if you have a run of losses? It will take you an awful long time to catch up.
Getting 80% of your trades right is not going to be an easy task. If you find a method that does that then let me know coz I want it!

Anyway, it's been a long week- I'm going down to the pub for a coldie. Enjoy your weekend ageo

 

[Ageo]

Re: CFD's anyone?

LOL so much maths in my life my head hurts!


I actually calculated it wrong frink.

Its actually almost 1:1 win/loss ratio

Why because i didnt realise that 0.6 was only the fee per trade and not calculated on every point.

So if i made 1 point it would only = .4 but then every point after that if i let it ride is 1 full point.

so if i made a 10 point trade i would actually recieve 9.4 pips (the 1st point always equals .4 pip).

So to sum things up

trade 1* 1 pip loss (plus 0.6) = 1.6

trade 2* 1 pip loss (plus 0.6) = 1.6

trade 3* 1 pip loss (plus 0.6 = 1.6

trade 4* 1 pip loss (plus 0.6 = 1.6)

trade 5* 1 pip loss (plus 0.6 = 1.6)

trade 6* 10 pip profit (minus 0.4 on the 1st pip which = 9.4)


8 pips down and 9.4 pips up = 1.4 pip profit


So out of 6 trades i lose 5 and still make a profit.

As you can see my style is to lose 5 small ones and ride 1 big 1

1.4 pip x 1 contract = $350US for outlaying on the $15,000 odd (obviously you would have a little more for a buffer). This is for the S&P 500

Thats the style im looking at trading, the reason why i like this style is i know im not always going to pick the winners but if i can pick 1 winner out of 6 then i will be more than happy.

Hope this clears things up and enjoy the pub Frinks (hehe im gonna have a few bourbons tonight aswell). Have a good weekend all

 

[Ageo]

Re: CFD's anyone?

Guys i just spoke with IG Markets and there after hours qoutes allow you to place a CFD trade on the aussie200 before 8am.



Now correct me if im wrong but when the Dow Jones usually hits 100 points or more in either direction couldnt it be possible to then place a trade on the aussie200 just before 8am to follow the trend?

I mean in the 2 yrs of trading i have never seen the aussie200 open against a strong dow jones move. It always follows it (like the 1 a few days ago).

Obviously i would have Gauranteed Stops in place to minimize the worst case scenario.

Thoughts?

 

[mit]

Re: CFD's anyone?

The thing is that it is open to everyone so you will find the SPI, Aussie200 or whatever tracking the Dow overnight. In fact you can look at them to get an indication where the traders will see XJO after opening. The way to make money is where you don't think the other traders have factored in the SPI move accurately.

An example is say the DOW moves down 200 overnight. CMCs Aussie200 moves down 100. You think it is oversold as the cash XJO wont go that far so you actually buy. the Cash XJO moves down 50 so the Aussie200 will move up 50 to meet it

MIT

 

[Ageo]

Re: CFD's anyone?

The thing is that it is open to everyone so you will find the SPI, Aussie200 or whatever tracking the Dow overnight. In fact you can look at them to get an indication where the traders will see XJO after opening. The way to make money is where you don't think the other traders have factored in the SPI move accurately.

An example is say the DOW moves down 200 overnight. CMCs Aussie200 moves down 100. You think it is oversold as the cash XJO wont go that far so you actually buy. the Cash XJO moves down 50 so the Aussie200 will move up 50 to meet it

MIT

Hey Mit, thanks for the reply

its free to open an account with IG and you can trade the mini contracts ($5 for the aussie200) so i will only know until i actually put some money on the line. With the limited risk trade it = 8 pips so the max i can lose on any trade for whatever reason it goes against me is 8 x the amount traded which in this case is $40.

Only time and results will answer me on this 1.

cheers

 

[Bobby]

Re: CFD's anyone?

Hey Mit, thanks for the reply

its free to open an account with IG and you can trade the mini contracts ($5 for the aussie200) so i will only know until i actually put some money on the line. With the limited risk trade it = 8 pips so the max i can lose on any trade for whatever reason it goes against me is 8 x the amount traded which in this case is $40.

Only time and results will answer me on this 1.

cheers

Ageo is that deal, market maker or DMA ?

Bet its MM be careful.

Bob.

 

[Ageo]

Re: CFD's anyone?

Ageo is that deal, market maker or DMA ?

Bet its MM be careful.

Bob.

Sorry whats DMA?

 

[robots]

Re: CFD's anyone?

hello,

if using IG etc around opening or closing make sure you have big stop loss, as there "price" fluctuates greatly around this time.

they want you to be stopped out, so you enter again, so be careful

thankyou
robots

 

[Bobby]

Re: CFD's anyone?

Sorry whats DMA?

DMA direct market access .

 

[Bobby]

Re: CFD's anyone?

Ageo have you read IGs ( Product Disclosure Statement ) ?

Bob.

 

[Ageo]

Re: CFD's anyone?

Correct me if im wrong but the aussie200 (xjo) doesnt open until 10am?


So from 7am to 10am wont it just be sitting there?

Also my stop will allow enough room to move a little.

P.S they can qoute after 9:45 so i might be able to slip a trade in before it opens.

Bobby that deal is from IG although i can manually stop my position if i want to but i will place the GSL as a backup.

 

[Ageo]

Re: CFD's anyone?

Ageo have you read IGs ( Product Disclosure Statement ) ?

Bob.

Yes Bobby why?

 

[Bobby]

Re: CFD's anyone?

Yes Bobby why?

Like to know what was said about MM & the cost of a GSL ?

 

[Ageo]

Re: CFD's anyone?

The GSL is just added to your spread (in the asx200 case 3 points extra).

For the added protection and my strategy that doesnt bother me at all.

Not sure what u mean about the Market Makers but im reading through it again now

 

[Bobby]

Re: CFD's anyone?

The GSL is just added to your spread (in the asx200 case 3 points extra).

For the added protection and my strategy that doesnt bother me at all.

Not sure what u mean about the Market Makers but im reading through it again now

Ageo 3 extra points for a GSL
Do you realise the implication of this ?

Bob.

 

[chemist]

Re: CFD's anyone?

Ageo 3 extra points for a GSL
Do you realise the implication of this ?

Bob.

Don't you know real traders don't care about costs?


Chemist

 

[Bobby]

Re: CFD's anyone?

Don't you know real traders don't care about costs?


Chemist

I must congratulate you on the obvious , deep stuff ! as i'm a real trader costs that are known are factored in .

But tell me something new ?

Bob.

 

[Ageo]

Re: CFD's anyone?

Hehe before you guys bagg the crap out of me the reason i said its not of a concern is because the trades im looking at are usually over 20 point swings.


Minimum twice a month,

My goal is 10 points per month (conservative bases) anything extra is a bonus. I wouldnt add the GSL to my plan if it wasnt worth it. All it takes is for 1 move to go against me and it could harm my account. With the right position sizing and positive expectancy i am happy to trade under these conditions. Although i will adjust accordingly as i trade live.

All in good time

 

[Bobby]

Re: CFD's anyone?

Hehe before you guys bagg the crap out of me the reason i said its not of a concern is because the trades im looking at are usually over 20 point swings.


Minimum twice a month,

My goal is 10 points per month (conservative bases) anything extra is a bonus. I wouldnt add the GSL to my plan if it wasnt worth it. All it takes is for 1 move to go against me and it could harm my account. With the right position sizing and positive expectancy i am happy to trade under these conditions. Although i will adjust accordingly as i trade live.

All in good time

Hullo Ageo,

Alls well mate, you ok ?

My advice is not to trade the SPI untill your good at normal share trading, much more forgiving.

Huge amount of help here, when you need it
Don't blow your capital.

Bob,

 

[Ageo]

Re: CFD's anyone?

Bobby, its $5 per contract! im only going to trade.


Max i can lose is $60 before my position is stopped out. My system allows me to have higher win/loss ratio with a nice risk/reward ratio (since im only doing a few trades per month).

So if worst comes to worse i lose all 4 trades for whatever reason it hasnt even effected my total capital not even a touch.

i appreciated the concern but i know the feeling of being over exposed before and losing lots of capital.

Anywayz ill keep you's posted

Cheera