No. With CFDs you just hit a button and get given a price. With Futures you execute into an exchange mostly one thats offshore.
Nope. You learn very little hitting a at market button of a CFD entry screen trading a couple of dollars a tick two or three times a day compared to getting a fill in an exchange at $250 to $2500 a tick and doing 10 to 100 round trips a day like you would trading prop.
Prop shops from what I've seen don't think a great deal about the skills people have picked up trading CFDs. You would be 1000 times better off learning the real thing right from the start.
You'd recommend trading futures for someone starting out then? I was under the impression futures have a pretty high minimum capitol requirement. So that's why I was thinking of trading CFDs to start off.
As for skills I'd assume you mean reading market depth and spreads right? Aside from those, I can't think of anything different between CFDs and futures if all you're doing is reading charts to get your entry and exit points.
Well the capital is a problem for a newbie sure. But thats the point of CFDs, forcing under capitalised, under skilled, hopefuls into the hands of the sharks. Probably better off in that case siming on a DOM like NT or zeroline.
Like I said just hitting a "at market" button at $5 tick is a million miles away from executing into a offshore exchange trying to get fills @ $250 a tick or more. If all you are doing is "reading charts to get your entry and exit points" we are back where we started. That is, IMO, you are unlikely to get the skills required to trade Prop while wasting time with CFDs.
The only decent reason i can see for trading CFD's is to have the ability to short Australian stocks. The leverage can be used to get exposure to a higher number of open positions and in theory to a big winner, providing you still use reasonable position sizing. From there its a matter of portfolio heat, or how much of your overall account is at risk from your total open positions.
My biggest 'lesson learned' was from CFD's. I was using the leverage in the wrong way and i lost over 17k AUD in less than two months. In a way i was lucky in that this was money that had made trading mining stocks when it was easy to confuse brains with a bull market!
CanOz
I'm trying to learn more about trading, I currently got a few Bill Williams and Larry Williams books on my read list too. Would be good though if I got some recommendations from experts like you on where to start and try out some of the theory in action.
Aye, that's what I thought about CFDs too. Its practically the only way you can short aus stocks. Obviously with any leveraged instruments if it goes against you, you get hit in a big way, but if it goes right you can make big profits as well.
BTW CanOz what do you trade with mostly?
What are you trying to achieve? Learning to trade or learning to trade to "hopefully" get a prop shop gig one day/soon?
If its trading to trade - knock yourself out trading CFDs with a small amount of capital. And remember enjoy the journey.
If you want to get a gig trading at a prop shop then thats a different game altogether. Which one you want?
Mate that is not true. If you use CFDs or straight stocks you still lose the same amount because you do not position size with leverage as the deciding factor. ?
Trying to make some money?I doubt I'll be trying to getting a gig at a prop shop unless I'm wildly successfully and turn out to be a trading genius.
But in the meantime I'm just trying to learn and see how it goes, hence the questions.
Aye, that's what I thought about CFDs too. Its practically the only way you can short aus stocks.
Also obviously with any leveraged instruments if it goes against you, you get hit in a big way, but if it goes right you can make big profits as well. =D
BTW CanOz what do you trade with mostly?
Ok no props in that case paper trade/sim your brains out. When you're profitable with that move up to the real thing in whatever interests you Stocks, FX, CFDs futs etc.
The only reason you would use CFDs is due to a low capital base. To trade futures depending on the timeframe you are going to need $25,000 (shorter term daytrading on some of the small contracts) out to $100,000 or more if your trading EOD or some of the more crazy markets, HSI, DAX, Oil, Gold, Grains etc.Can you please clarify some of the questions on #544 though? Eg Fut or cfds, capitol req, confusing paragraph etc. Still interested in getting your opinion.
Also I have no preference.
I'm trading shares right now 1-3 times day, but I would like to trade more with bigger instruments when I get more experienced so what you've said matters alot! Though the way you say it can be a bit confusing to a newbie like me.The only reason you would use CFDs is due to a low capital base. To trade futures depending on the timeframe you are going to need $25,000 (shorter term daytrading on some of the small contracts) out to $100,000 or more if your trading EOD or some of the more crazy markets, HSI, DAX, Oil, Gold, Grains etc.
Trading CFDs to some degree and MM Fx is easier than futs or ECN FX because you just hit a button and get a price from your market maker. With futs and ECN and OS equities you have lag and a fast market which adds an added problem of getting fills and slippage. Then if you move up to trading real size on short term time frame you will find CFD execution skills are next to useless. This is of course talking on a shorter term time frame 10-100 trades a day. If your trading EOD or 1-3 times a day probably none of what I have said matters.:
Again not sure what you mean by this, CFD execution skills? Like putting the quantity, limit order and stop loss targets? Don't think you need skill for that. Just type the numbers in. If you're referring to finding a software to do the above quickly then its more a function of the software. And yes I would like to find a program where I can set default lot sizes, set different prices with a mouse click, switch from buy position to short quickly, have good charting functions etc. (any recommendations?)Then if you move up to trading real size on short term time frame you will find CFD execution skills are next to useless." .
when you refer to "skill"."Like I said just hitting a "at market" button at $5 tick is a million miles away from executing into a offshore exchange trying to get fills @ $250 a tick or more. If all you are doing is "reading charts to get your entry and exit points" we are back where we started. That is, IMO, you are unlikely to get the skills required to trade Prop while wasting time with CFDs."
I thought this is the newbie lessons thread? Or is this the newbie insulting thread?
Its not hard to answer my questions and give a proper explanation but all you two guys seems to be interested in is avoid everything I ask and hell bent on proving you're superior like some ego maniac.
If you don't wanna answer my questions fine then don't post. You dont have an asshole about it jez.
I thought this is the newbie lessons thread? Or is this the newbie insulting thread?
Its not hard to answer my questions and give a proper explanation but all you two guys seems to be interested in is avoid everything I ask and hell bent on proving you're superior like some ego maniac.
If you don't wanna answer my questions fine then don't post. You dont have an asshole about it jez.
Oh, the irony.Yeh mate, unfortunately you get a lot of that here - but don't worry, some people are nice
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