Starting to trade CFDs

jama_kj · 24 April 2008

Hi wondering if someone cold recommend a CFD provider for someone who is just starting out.

I've had a look at some such as IG Markets and Commsec but am unsure of which one to go with. I liked the platform of IG Markets but am unsure of the cmpanies reliability (does the money get pooled or is there anything i should be weary of about the org?). Obviously the reliability and security is there with Commsec but i really didn't like the platform.

Are there any other providers that ppl would recommend that is easy to use, DMA and relatively cheap as I am starting with just 30K? What do ppl think about Mac Prime?

jama_kj · 24 April 2008

Re: Starting to trade CFD's

just was reading over IG Markets PDS - do they provide DMA CFD's or STP

Trembling Hand · 24 April 2008

Re: Starting to trade CFD's

jama_kj said:
just was reading over IG Markets PDS - do they provide DMA CFD's or STP

No they are Market Makers. MF global have DMA CFDs

Kauri · 24 April 2008

Re: Starting to trade CFD's

jama_kj said:
just was reading over IG Markets PDS - do they provide DMA CFD's or STP

DMA is there if you want it (with IG) or you can go MM..

http://www.igmarkets.com.au/cfd/dma-equities.html

Cheers
...........Kauri

jama_kj · 28 April 2008

Re: Starting to trade CFD's

do ppl think that there is a possibility of IG going bust, coz i noticed that it clearly states that clients will be considered as unsecured creditors. i've had a quick look at their company and noticed it's a listed company in UK and has a pretty big market cap, so i would think its fairly secure, yeh?

also is it only the market makers that allow you to trade CFD's on forex, gold, etc. because they can practically create markets for anything or can DMA providers allow this too?

kesso · 28 April 2008

Re: Starting to trade CFD's

Hope I am not hijacking the thread but I have a couple of questions. Firstly can you assuming current price is 155, buy if it rises and hits 159 up to a buy limit of 161, with a stop loss if done of 154 with any CFD?

I have just started an IG demo account and I thought I could do it but it worked out that the limit seems to mean sell if you get to that price, not what I wanted as it sold me out of a rising share price.

Also I think that the IG demo is a market maker, as I did the above over the weekend and this morning the low is 162 but the demo program bought me in at 159 and sold at 161. The high is 167. Can not work that one out.

cogs · 28 April 2008

Re: Starting to trade CFD's

Hello kesso,

You need to get a much clearer picture of what and how IG and CFD's work in general.

The demo account has no effect on the market (not influencing price) compared to live trading. It is quite easy to make a bundle with the demo account.

I have recently opened an account with IG 'Limited Risk' . You need to look closely at the 'spread price' and the 'displayed price' to understand where to place an order and market price swing in relation to the according spread.

In your posting it appears your statement -

" I did the above over the weekend and this morning the low is 162 but the demo program bought me in at 159 and sold at 161"

it would appear that you are viewing the chart price which doesn't take into account 'spread'.

IG hedge heavily and you will need to be trading a good trend or your stops are taken out every time, they also appear targeted.

Please do not take this as professional advice, just my experience. Hope it helps.

Trembling Hand · 28 April 2008

Re: Starting to trade CFD's

cogs said:
The demo account has no effect on the market (not influencing price) compared to live trading.

Neither does the market maker model.

cogs said:
IG hedge heavily and you will need to be trading a good trend or your stops are taken out every time, they also appear targeted.

Could you explain this a bit further. From my understanding with MM they don't directly hedge every trade. And have yet to see a price moved by a CFD provider just to hit a small punters stop.

cogs · 28 April 2008

Re: Starting to trade CFD's

Hello Trembling Hand,

Like I mentioned in my posting "Please do not take this as professional advice, just my experience."
You may have experienced differently.

Who was/is the small punter?

Trembling Hand · 28 April 2008

Re: Starting to trade CFD's

cogs said:
Like I mentioned in my posting "Please do not take this as professional advice, just my experience."
You may have experienced differently.

Who was/is the small punter?

I would guess 90% of people using CFDs are small punters. But my question was about your stops being 'targeted'. What was your experience of this. I assume this means either the CFD provider moved their quoted price away from the underling market or they moved the actual physical market just to hit your stop. Is that what you mean?

cogs · 28 April 2008

Re: Starting to trade CFD's

90% of people using CFDs are small punters

Ah I see.

Surely you have experienced what would appear to be 'stops being targeted'? It's probably just me. Anyone else?

I assume this means either the CFD provider moved their quoted price away from the underling market

Your assumption may be correct as hedging can achieve this, no? Certainly in my experience it can be all too obvious.

My previous methods of trading, lets say without stops, definately puts a new light on returning profit. There are many views relating to 'stops' and I see many posted here. Let it be said that trading CFD's without stops is suicidal.

Trembling Hand · 28 April 2008

Re: Starting to trade CFD's

cogs said:
Surely you have experienced what would appear to be 'stops being targeted'? It's probably just me. Anyone else?

Your assumption may be correct as hedging can achieve this, no? Certainly in my experience it can be all too obvious.

Actually no. I have never seen a CFD provider move a market to take out stops. The cost of doing so would be 100 times more than the gain of a couple of retail clients stops. And if they did directly hedge positions(which I think they don't) I still don't see the market being moved.

Mostly it is retail clients placing poor stops or more like it poor entries.

cogs · 28 April 2008

Re: Starting to trade CFD's

I have never seen a CFD provider move a market to take out stops.

I have many times over the past 10-12 years. You can actually set it up and it becomes quite obvious.

And if they did directly hedge positions(which I think they don't)

If the majourity (sheeple) trade and think the same it would prove quite profitable. CFD companies would spend a large portion of their budget to make this action not provable and with little evidence for retailers to provide if they were suspicious.

Mostly it is retail clients placing poor stops or more like it poor entries.

Would they be your 'retail clients'?

After speaking directly with a consultant his words were, " Yes of course we hedge" but adamant against targeting stops, but I didn't really expect him to say " Yes we target stops also".

Anyway this has been my experience and no doubt others have varying views also.

Trembling Hand · 28 April 2008

Re: Starting to trade CFD's

cogs said:
I have many times over the past 10-12 years. You can actually set it up and it becomes quite obvious.

Show us an example of where a market was moved to take out stops. Please!
Would love to see an example of what you are talking about. What instruments are you talking about? BHP etc? Index? Forex?

kesso · 29 April 2008

Re: Starting to trade CFD's

Thanks COGS opened my eyes a bit with that spread.

laurietm · 30 April 2008

Re: Starting to trade CFD's

I'm with Cogs on this one it is very clear Ig go after stops just be cautious on how you use them the market is very violatile funnily enought i have had a stop taken out to my advantage which was about 30 points away from trend it was a long standind short and i think they just wanted to clean it off also same thing with orders to open will just misss by point or half then swing away because they are market makers can do it so when it happens treat it as learning lesson

Trembling Hand · 30 April 2008

Re: Starting to trade CFD's

What a load of Rubbish. Show me what instrument you are talking about and I will show how many Millions it takes to move something 30 points just to take out a stop or two.

This assumption has profound effects on your trading and I warn anyone not to listen to this stuff. When you get stopped out and you put it down to manipulation by your broker what is that saying about your approach, mindset, entries, stops AND most importantly responsibility for your OWN actions and ability to learn.

This is the problem with trading blind. If you need to trade CFDs throw away their data and watch the REAL market that its linked to the cfd to see what is really going on!!!!!

laurietm · 30 April 2008

Re: Starting to trade CFD's

Should have specified I was talking about the xjo index on IG called Aussie 200 .. Agree would take bundle of money to maniplulate say BHP NAB but who knows about smaller stocks ... anyway if using MM CFD for index trading just be aware of there actions in taking out stops

Trembling Hand · 30 April 2008

Re: Starting to trade CFD's

laurietm said:
Should have specified I was talking about the xjo index on IG called Aussie 200

What would a Futures trader do if the Aussie 200 "drifted" away from the underlying SPI price? to supposedly hunt stops??????????????????????????????????????????

professor_frink · 30 April 2008

Re: Starting to trade CFD's

Trembling Hand said:
What would a Futures trader do if the Aussie 200 "drifted" away from the underlying SPI price? to supposedly hunt stops??????????????????????????????????????????

They'd be opening an account with IG quicksmart

Now where's that application form.........

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