CFD platform for inexperienced trader?

[CitizenKane]

I know that the trading platform question has been asked before and I have gleaned some good advice from reading previous threads but can I ask ASF members if they could recommend a platform that would be more suitable for someone just starting to trade CFD' s.
Although I have bought/sold ordinary shares for many years (through Sanford ) I now want to try something a bit more sophisticated. I have requested several trial offers and will be working through them over the next few weeks but without much experience in this area it's hard to asess them properly.
I dont want to do anything too fancy just yet but I am keen to trade using trailing stops so would like to go with a broker that provides this option.
Are there any platforms which do limt/stop orders in a format which is easier to understand for a new trader?
One of the posts mentioned IG Trade Sense as being suitable for newbies so that's one that I will be looking at.
Thanks for any help you can provide.

[>Apocalypto<]

I know that the trading platform question has been asked before and I have gleaned some good advice from reading previous threads but can I ask ASF members if they could recommend a platform that would be more suitable for someone just starting to trade CFD' s.
Although I have bought/sold ordinary shares for many years (through Sanford ) I now want to try something a bit more sophisticated. I have requested several trial offers and will be working through them over the next few weeks but without much experience in this area it's hard to asess them properly.
I dont want to do anything too fancy just yet but I am keen to trade using trailing stops so would like to go with a broker that provides this option.
Are there any platforms which do limt/stop orders in a format which is easier to understand for a new trader?
One of the posts mentioned IG Trade Sense as being suitable for newbies so that's one that I will be looking at.
Thanks for any help you can provide.

When I was trading CFD's I found IG Markets Pure Deal platform to be very user friendly and stable. Basic compared to others out there but very satisfactory. They also offer Limit orders buy and sell stops and I hear in the not to distant future they will be offering trailing stop loss orders. I think they offer a demo now as well.

Cheers.

[tayser]

Pacific Tader offers a one month demo with trailing stops, very nice integrated platform too (Futures and FX as well as CFDs and equities).

[im sparticus]

I'm with maquarie cfds no platform fee and you can turn off data so no data fee (though your open positions will tick over in live real time) they have limit and stop orders at no charge min $10 per order then .125 thereafter and you recieve a great interest on your cash.

[CFD]

I'd stick with IG Markets Pure Deal Platform to learn. You may not wish to stay with them but it's a good place to start. If you have an open cfd, with target and stop loss orders, and you wish to close the trade you do not have to tell them how, you just select close.

[adamim1]

Are CFD's more risky then ordinary shares?

I'm new to both shares and CFD's and was looking to get into CFD's. Is it recommended for someone new to try CFD's? I was looking at CMC Markets.

[Trembling Hand]

Are CFD's more risky then ordinary shares?

I'm new to both shares and CFD's and was looking to get into CFD's. Is it recommended for someone new to try CFD's? I was looking at CMC Markets.

They are more risky simply because people don't use them correctly. If you only every risk 2% of your account on any one trade then CFDs are no riskier than shares. But newbies think that the leverage you get with them enables you to trade BIGGER and that is where the risk comes from.

Of course with any leveraged product you can loose way more than what you have in your account which will not happen with standard share trading.

If you are new to the game you should stay away from leverage until you have some results to back up your use of what is really a experienced traders tool.

[CFD]

If you only every risk 2% of your account on any one trade then CFDs are no riskier than shares. ~~

If you are not familiar with this aspect of money management, please learn it thoroughly before you start trading. Then practice it with a demo account.

[CitizenKane]

Thanks to you all for the replies - I appreciate your help very much.

I will have a closer look at all the suggested platforms. The IG Pure Deal sounds like a good place to start and its not one that I was even aware of.

Best wishes to you all.

[porkpie324]

I think at this present 'jittery' period CFDs are extremely risky. I have traded CFDs very succesfuly up until about Aug/Sept last year, the market is just not trending for CFDs right know. at this time I only open a position if there is a sharp selloff then they only remain open briefly. The market can at this time turn against you on the slightest wiff of bad news. Getting back to the ogiginal question I used CMC markets to which I had know problems, more importantly when I took profits the cash was in my bank account the next day, with no questions asked, porkpie

[Trembling Hand]

I think at this present 'jittery' period CFDs are extremely risky. I have traded CFDs very succesfuly up until about Aug/Sept last year, the market is just not trending for CFDs right know. at this time I only open a position if there is a sharp selloff then they only remain open briefly. The market can at this time turn against you on the slightest wiff of bad news. Getting back to the ogiginal question I used CMC markets to which I had know problems, more importantly when I took profits the cash was in my bank account the next day, with no questions asked, porkpie

If your trading isn't working in this environment how are CFDs more risky than direct shares. :confused::confused:

[nunthewiser]

Reckons learn to walk before ya learn to run , i use cfd,s but have been trading for some time , NO room for undisciplined actions and when they teach you a lesson it can be a very painful lesson , my advice/thoughts is to try the asx cfd game or maybe get a little bit of normal trading experience first b4 going for the leverage game , only thoughts.

[porkpie324]

That's easy, you get wiped out a lot faster using a geared investment, capital preservation is your first consideration when trading, porkpie

[Trembling Hand]

That's easy, you get wiped out a lot faster using a geared investment, capital preservation is your first consideration when trading, porkpie

That's is where you have gone wrong. The amount you risk in trading has nothing to do the gearing. This is classic mistake.

2&#37; rule ALWAYS applies no matter what the leverage is. CFDs are more risky because of the way you used them.

[korrupt_1]

CFD for the inexperienced?

Get a demo a/c and start messing around with it. That's what i did in the early days. Read, read, read and read about as much about CFD as possible. Then open another demo a/c and mess around some more.

You're going to learn much more about CFD with trying it out than someone here telling you about it. Stops, limits, order to open, etc are things that confused the heck out of me in the early stages.

Once you *think* you understand the concepts, open a real trading a/c with about $200 and start learning from first hand experience.

Not sure if IG Markets still has the Trade Sense program, but it allows traders to trade as little as $0.50c/point on the Aussie 200 Cash/Forward index. You'll be risking bugger all and it will be REAL money that you'll be learning with. If you lose all $200,... then you either didn't do enough "messing around". If you do lose some money, consider it as an education fee... formally or informally, you're going to pay for it.

[porkpie324]

Forgive me TR but where did I go wrong, I made stacks during the market rally, then as the market stopped trending I found it a hell of a lot more difficult. So I trade very little at the moment, when the market starts to trend better again I'll be back. I still have a healthy balance in my account. Perhaps you need to understand gearing a little more, yes you do loose the same wether your geared or not but the concept of geared trade is that a little goes a long way, or if the trade goes against you, you loose a lot more, porkpie

[Trembling Hand]

Perhaps you need to understand gearing a little more, yes you do loose the same wether your geared or not but the concept of geared trade is that a little goes a long way, or if the trade goes against you, you loose a lot more, porkpie

But that is not true. You shouldn't be losing any more of your account if you use CFDs, Margin loan, Options or Direct shares (catastrophe's aside) If you are using correct money management. If you are losing a greater % of your account because of leverage you ain't using it correctly.

That is the mistake. Money management.

[korrupt_1]

Porkie and TH.... both of you use different trading strategies... so neither is wrong or right... it all boils down to a trading strategy that WORKS FOR YOU.

Like TH, I scalp a few points here and there... but also like Porkie, I also trade the trend as well... both strategies has a time place and a level of CONTROLLED risk.

This highlights the fact that with CFD, it's even more important that you have a strategy... In the event that a trade turns bad, your strategies will allow you to exit a trade without too much damage. Again, TH's 2% rule is a classic one... only risk 2% (or whatever you're level of risk is) on any trade... this strategy will ensure that you only lose 2%... fullstop. If you continue to lose 2% on every trade, then you need to go back to square one and find out why your entries sux and change trading tactics.

[Trembling Hand]

This highlights the fact that with CFD, it's even more important that you have a strategy... In the event that a trade turns bad, your strategies will allow you to exit a trade without too much damage. Again, TH's 2% rule is a classic one... only risk 2% (or whatever you're level of risk is) on any trade... this strategy will ensure that you only lose 2%... fullstop. If you continue to lose 2% on every trade, then you need to go back to square one and find out why your entries sux and change trading tactics.

But that is my point if you take your max loss per trade as 2% of account balance it is irrelevant what instrument you trade or how you trade. OR how much leverage you use. Therefor CFDs are not riskier (catastrophe's aside). :banghead:

[porkpie324]

Unfortunatly a 2% stop rule with CFD's does not work. You get what we call an opening gap from the previous close. If you have a stop in place you will get stopped out, ( I prefer to trade CFD's without a stop)
TH I do as I posted know you loose (or gain) the same ammount no matter what instument you care to use, I also understand the concepts of strict money management, I've been trading successfully for many years now so I like to think that I have mastered MM.
I do also take long term positions in physical shares, I'm in the accumalation period now with certain mining stocks.
I also like to think that holding off CFD trades at this time is the best strategy until the market starts to settle again. After all why beat yourself up when it's unecessary, porkpie

[Trembling Hand]

Unfortunatly a 2% stop rule with CFD's does not work.

WHY?????????????

$10,000 account. Max risk per trade 2% of $10,000 is $200.

Stock price at $2.00
Stop price at $1.70

Stop value $0.30

$200 / $0.30 = Max amount of shares which is 666Shares

No matter what you use to trade, CFDs, Margin or direct shares

It doesn't mean a 2% share price movement. I don't think you have got MM down at all :(

[Kauri]

I can't for the life of me unnerstand why someone on CFD's wouldnae be in this market... for me the main advantage of CFD's so's the ability to go short... 2 charts below... if you would go long the first one... why would you not be short the second... after all tis only the first one inverted... the only concession I make to the current market is to be using the GSL... those who are into the CFD's only to get the leverage are ... well... running a risk??? I thunk...

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

P.S CTX...

[CitizenKane]

CFD for the inexperienced?

Get a demo a/c and start messing around with it. That's what i did in the early days. Read, read, read and read about as much about CFD as possible. Then open another demo a/c and mess around some more.

You're going to learn much more about CFD with trying it out than someone here telling you about it. Stops, limits, order to open, etc are things that confused the heck out of me in the early stages.

Once you *think* you understand the concepts, open a real trading a/c with about $200 and start learning from first hand experience.

Not sure if IG Markets still has the Trade Sense program, but it allows traders to trade as little as $0.50c/point on the Aussie 200 Cash/Forward index. You'll be risking bugger all and it will be REAL money that you'll be learning with. If you lose all $200,... then you either didn't do enough "messing around". If you do lose some money, consider it as an education fee... formally or informally, you're going to pay for it.

Korrupt,
I take your point -"CFD for the inexperienced" does sound a bit Lemming-like.
Having read through a lot of posts on this forum (and other research) I am very aware of the possible dangers. But I have decided to ratchet my enthusiasm back a few stops before leaping and will spend some more time on educating myself. I do have a demo account which I found confusing initially, thats why I posted the original question. Obviously I need to spend more time on it and other platforms as well.

To Porkpie,TH and Nun
Even though I was aware of the 2% strategy (and intending to apply it!),I appreciate your comments about MM. I wasn't going to risk too much of my hard earned initially anyway but you have certainly reinforced the importance of money management (as well as extensive preparation before trading) to me.

Thanks again to everyone.

[porkpie324]

Yes your right Kauri, but the stocks I was trading CFD's were nickel stocks ie MCR IGO SMY, they are stocks I also hold using the physical market, they are stocks I understand and I like to think I understand the fundementals of, these stocks have not been trending, so I am staying out of CFD's for that reason. As I mentioned I was very succesful trading these miners whilst they were trending. I am comfortable trading these using CFD's, I just hate to give hard earned profits back to the market, thats the reason I'm staying cashed up (CFD wise) porkpie

[Young Gun]

I think you are getting confused with a 2% stop and a stop as 2 % of the equity.

If you have a $1,000 account and using it to leverage , only risk a maximum loss of 2% x $1,000 or $20.

[eric341]

TH is right, the main reason why newbies blow up their margin accounts is due to incorrect risk and money management.

When I started with CMC a month ago, I increased my account balance by 10% on the first day, but I subsequently lost around 30% of the initial balance over the next week. I learnt an important but expensive lesson from this- cut your losses short, and enter trades with targets in mind (profit/loss boundaries).

Also, analysing my trade history has been beneficial. Looking at my past trades, most of my winners were of low-mid worth while my losers tended to be quite heavy ones. Although my winners outnumbered losers 2-1, I ended up with negative expectancy (which means I will probably eventually lose all of my money unless I change my trading style).

Since that analysis the importance of cutting losses short (risk management) has hit home and nowadays I don't suffer as much volatility in my account balance as I used to. I'm still recovering from my loss though.

PS. I'm a novice scalper and I normally trade the DAX and ASX200.