Australian (ASX) Stock Market Forum

The Dangers of CFDs

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Wysiwyg: The chart indicates to me that you started a trade in this cfd-index before the market that the cfd is based on opened. Spikes in the opening price bar of an index future is a natural occurence as the funds buy/sell the index to catch up with any overnight (and world) moves.

Please wait until the market that you are trading is open. You can see the difference in the size of the bars and their movement when the market is open.
 
Wysiwyg said:
My post is self explanatory and i cannot make it simpler or provide an interepreter.
Click to expand...

I assume then you are saying the CFD provider fudged you out of a trade. But the DAX doesn't always follow the YM. What date is that from and I will check the Futs?
 
wayneL said:
Did the futures do the same thing at the time, or was it just the CFD?
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Wayne, i can`t get a detailed March futures chart but as i posted the indices track the Wall Street Cash chart closely but this drop off didn`t happen on the Wall Street Cash chart.

Peter2, these CFD instruments were both open together.
 
daxpf1.png
 
Wysiwyg said:
Wayne, i can`t get a detailed March futures chart but as i posted the indices track the Wall Street Cash chart closely but this drop off didn`t happen on the Wall Street Cash chart.

Peter2, these CFD instruments were both open together.
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It strictly doesn't matter what WS30 is doing (though high correlation noted), the German 30 should be tracking the DAX.

So the question is: What did the Dax do? I would be very interested in the answer.
 
Sorry Wysiwyg as you from the Futs from that day the DAX chart is pretty much the same as the CFD chart. The DAX DOESN"T ALWAYS track with the YM.
 

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Ok .... the lesson was DONOT trade before markets open and DONOT hold overnight.Thankyou world.
 
Hi all,

Being fairly new to CFDs this sort of thing has happened to me a few times.

Normally I would put it down to experience but last night at 10:30 on the dot I was stopped out of a CFD Aussie 200 trade only to watch the market reverse almost instantly.

I entered short at 3:29pm at 4938.5 after EMAs crossed and some resistance at 4972 expecting more falls with my initial stop at 4978.5 (possibly not seeing the slight uptrend??)

At 9:35 I moved my stop 10 points to 4988.5 to allow a bit of breathing room for increased spread etc. All seemed fine when the market fell from 4984 then jumped slightly higher to close my second stop.

The price on this chart didn't actually get to 4988.5 but the spread was about 11 points by then.

The chart is from IG markets pure deal platform. I checked the Australian 200 Sep 08 on City Index and it looks like the same movement happened.

I know if I hadn't have been stopped out then, I would have woken to a nearly stopped position this morning anyway. Although if I hadn't been stopped out last night I would have been able to get out at break even at least...

I'm pretty sure it's just one of those things but if anyone has any ideas I welcome them!

Feel free to pick as many holes in my style as ya like! :eek:

chart-aussie200-100708.jpg
 
acedrum said:
Normally I would put it down to experience but last night at 10:30 on the dot I was stopped out of a CFD Aussie 200 trade only to watch the market reverse almost instantly.

I know if I hadn't have been stopped out then, I would have woken to a nearly stopped position this morning anyway. Although if I hadn't been stopped out last night I would have been able to get out at break even at least...

I'm pretty sure it's just one of those things but if anyone has any ideas I welcome them!
Click to expand...

Just a bad trade. :p:
 
acedrum said:
Haha, yes indeed. Always learning.
The previous 5 good trades in a row were probably flukes! :p:
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The reason I said that is we have lost 160 odd points this week touching new 2 years lows. Yesterday we made the low on the open and went up all day, making higher lows. You are shorting a stretched market with a tight stop in after hours trading. Thats a bad trade IMHO.
 
Trembling Hand said:
The reason I said that is we have lost 160 odd points this week touching new 2 years lows. Yesterday we made the low on the open and went up all day, making higher lows. You are shorting a stretched market with a tight stop in after hours trading. Thats a bad trade IMHO.
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Thanks TH, point taken.

I actually closed a 109 point short trade yesterday morning at 4909 then went long at 4918 only to be stopped at break even as I had to leave the house! I've not traded at this point of the market before so I'm having some fun figuring out what's going on. :banghead::D
 
Trembling Hand said:
The reason I said that is we have lost 160 odd points this week touching new 2 years lows. Yesterday we made the low on the open and went up all day, making higher lows. You are shorting a stretched market with a tight stop in after hours trading. Thats a bad trade IMHO.
Click to expand...

While nowhere near TH's skill level, I tend to agree.

On that chart, price was making higher highs and higher lows, then you shorted the market near the bottom of a largish move down, not a good way to put the odds in your favour imo.

I would have actually been looking to go long where you went short with a stop under the previous major low after I'd seen some signs of that leg down coming to a finish.

Also I would have been tightening my stops not making them wider after I'd seen the 2 candles with long tails just after you'd gone short. In fact those candles would have had me seriously looking to stop and reverse my position if I was short.

Easy in hindsight:p::D
 
nomore4s said:
Easy in hindsight:p::D
Click to expand...

Yep, I realised it was all bad not long after I got in, I guess the point I was trying to make is that it reversed as soon as it hit my 2nd stop.

I also forgot to mention I had been at the pub before I moved my 1st stop...:eek:
Ah well. Live and learn.
 
Trembling Hand said:
The reason I said that is we have lost 160 odd points this week touching new 2 years lows. Yesterday we made the low on the open and went up all day, making higher lows. You are shorting a stretched market with a tight stop in after hours trading. Thats a bad trade IMHO.
Click to expand...


Much wisdom in those two sentences .....

Trading the IG Aussie at night is a recipe for "donating" cash to IG unless you are brave enough or crazy enough to run without stops. If the spreads don't get ya' the high/low spikes sure will.:shoot::ald::bigun2:

Out of interest TH, Wayne, (anyone) .... is the IG Aussie 200 following a "real" index during after hours trading (ie while the Dow is open)? or are the punters actually at the mercy of the MM's.
 
barney said:
Out of interest TH, Wayne, (anyone) .... is the IG Aussie 200 following a "real" index during after hours trading (ie while the Dow is open)? or are the punters actually at the mercy of the MM's.
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I never follows an index. It's ALWAYS linked to the SPI.
 
barney said:
Trading the IG Aussie at night is a recipe for "donating" cash to IG unless you are brave enough or crazy enough to run without stops. If the spreads don't get ya' the high/low spikes sure will.:shoot::ald::bigun2:
Click to expand...

True, but there are also plenty of opportunities to benifit from big moves if you're on the right side.

FYI went long Aussie 200 about 30mins ago haha .:D
 

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