CFDs - What are the better alternatives?

[Kryzz]

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/06/the_real_cost_o.html

 

[Twiddle]

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/06/the_real_cost_o.html

Thanks for that Shaunkris89 and Trembling Hand. That sums up exactly what I was meaning.

Quick question; with the futures contract in the scenario, what kind of flexibility to you have to close the position?

With a futures contract are you locked into the limits/timings you set right at the beginning of the trade?

For example, with a few CFD trades I have decided after observing for a while that my limit is not going to get hit, and it is about to turn nasty. So I close the position at the point it is at instantly, and take the profit. Albeit not as much as I was hoping.

Can you do this with futures also?

(apologies for my ignorance, I have no experience with futures at this stage)

 

[nomore4s]

Can you do this with futures also?

Yes.

The best way to sum it up is - Professionals trade the Futures, wannabe traders with accounts too small and/or limited understanding of the markets trade with CFD's.

 

[Twiddle]

Yes.

The best way to sum it up is - Professionals trade the Futures, wannabe traders with accounts too small and/or limited understanding of the markets trade with CFD's.

Cheers nomore4s.

I don't plan on trading for a long time yet (demo trading atm), as I want to build up as much knowledge (and capital) as possible and have worked out a successful trading strategy first.

Could you answer me this though.

What would be the minimum account size you would recommend for getting involved in futures trading?

 

[nomore4s]

What would be the minimum account size you would recommend for getting involved in futures trading?

Probably a minimum of $25,000 but it also depends on what your goals and expectations from trading will be.

If looking to trade full-time for a "wage" I personally think you would need at least $50,000 plus $50,000 to live off for the first year.

If only looking to earn addition income to support your normal wage $25,000 is probably enough(depending on skill level of course). You could actually get away with less but you would need to be extremely skillful & experienced to make it work imo.

 

[Twiddle]

Thanks again.

 

[nunthewiser]

Yes.

The best way to sum it up is - Professionals trade the Futures, wannabe traders with accounts too small and/or limited understanding of the markets trade with CFD's.

rubbish


And some traders ONLY use cfd,s for shorting the odd ASX listed stock ..nothing more

 

[>Apocalypto<]

Yes.

The best way to sum it up is - Professionals trade the Futures, wannabe traders with accounts too small and/or limited understanding of the markets trade with CFD's.

Sorry Nun I agree with parts of this. over 96% of the fulltime traders I have spoken to trade futures options and shares. Never met a full time CFD trader. One full time options trader used CFDs only to hedge.

 

[nunthewiser]

Sorry Nun I agree with parts of this. over 96% of the fulltime traders I have spoken to trade futures options and shares. Never met a full time CFD trader. One full time options trader used CFDs only to hedge.

Thats great ,you guys are obviously correct then.

I am obviously a wannabe trader with a tiny capital base because i never took the time to look into option trading and prefered to keep my ASX listed stock trading simple to ME by using a non leveraged instrument for going long(basic chess sponsored mother stock purchase via a non cfd broker) and a basic DMA based CFD provider for going short .

Sorry guys will stick to the general chat and leave the expert comments to you guys that know other guys that know stuff .

 

[nunthewiser]

mmm actually i think i read somewhere in these threads that radge also uses MAN finacial DMA cfd,s also in the past . If i had the time i would dredge up a post or two where he mentioned them but i havent so will just take it as he just another wannabe with no cash sort of trader also.

Funny place internet forums.

 

[>Apocalypto<]

Thats great ,you guys are obviously correct then.

I am obviously a wannabe trader with a tiny capital base because i never took the time to look into option trading and prefered to keep my ASX listed stock trading simple to ME by using a non leveraged instrument for going long(basic chess sponsored mother stock purchase via a non cfd broker) and a basic DMA based CFD provider for going short .

Sorry guys will stick to the general chat and leave the expert comments to you guys that know other guys that know stuff .

don't take it personally, maybe you can be the first!

 

[nunthewiser]

Yep i lied , i did have the time ..........

So..................

who is gunna break the news to Radge that he obviously a "wannabe trader with no capital base" ? ........

geeeezus

 

[nunthewiser]

Glad to see im not the only one that dribbles unsubstantiated crap in these threads at times...........

As you were boys .

 

[nomore4s]

rubbish


And some traders ONLY use cfd,s for shorting the odd ASX listed stock ..nothing more

Geez nun don't give yourself a hernia.

I was in general referring to trading things like futures, using CFD's to short ASX stocks is really the only option in many cases but for trading futures and other instruments it is too expensive to be considered for regular use imo.

 

[nunthewiser]

Geez nun don't give yourself a hernia.

I was in general referring to trading things like futures, using CFD's to short ASX stocks is really the only option in many cases but for trading futures and other instruments it is too expensive to be considered for regular use imo.

LOL no hernias mate .

Just pointing out the post i quoted from you was a little bit cheeky and not true in my view .

However TOTALLY agree on this post .

Cool now we can be Bro,s again . Dunno about that other fella tho

 

[georgey]

I had over 100 grand 10 yrs ago and lost it all with warrants and leveraged stock trading.
Now back on track with a lovely girl (only 55yrs young) and a big mortgage to pay back, this
gives me a great base to work from (mortgage comes first). My paltry 2 grand with CMC allows me
to learn what I didn't know before. The small size takes the pressure off while one is learning
the multitude of little things one needs to absorb into ones subconcious to be a better trader.
Time in the market and at the screen is vital and the small size allows that. As Tom Baldwin in
Market Wizards hinted "if you stay at something long enough, you have to pick it up". Just like
walking, keep at it and you will learn in your own way, just don't fall off a cliff in the meantime.
Looks like I would need to get my account up to about 25 grand and be trading up to 25 contracts with
CFD's when I would consider moving to futures with the smaller spread. Need to slowly get used to
being down $250 on a measly 10 pt move. That will be 2-3 yrs away I think, if at all.

 

[Twiddle]

From the looks of it, different trading instruments suit different objectives. With knowledge and experience comes the ability to exploit the useful ones in various ways despite any inherent flaws they might posses.