Just a suggestion only. You may like to open up a practice cfd account with a virtual $10,000 and trading software for 14 days free with www.cmcmarkets.com.au. Once you have carefully conceived your trading plans you can try them out and see if they work for you in real time. You might like to do this as long as it takes you to trust and obey your system consistently before you commit real cash. It is very wise not to proceed any further until you get to this point and are paper profitable. When you are ready to start trading live it may be advantageous to take one trade at a time with a small stake until you get used to handling and dominating the inevitable and possibly unfamilar emotions that inevitably occur when real cash is at stake. The idea being that if you can be faithful in a little then you can be faithful in a lot. The goal as in everything else is to do it very well. Then the money will come.
I can reccomend an excellent trading book, that explain a traders dilemma, crowd psychology and market timing better than most other books. It is a classic:
Edwin Lefevre: "Reminicences of a Stock Operator."
My favourite quote from that book: "He said that the only thing that didn't lie because it simply coulden't was mathematics."
Here is an explanation from Macbanks CFD site which explains the difference succinctly:
There are two distinct models by which CFD prices are offered by the various CFD providers:
Some CFD providers act as a market maker where they offer synthetic CFD prices which have the potential to be different to the underlying market price. Investors trade at prices determined by the provider - which gives the provider the flexibility to offer CFDs based on security prices which are higher or lower than the prices in the underlying market.
Other providers offer direct market access where they offer CFD prices and liquidity that are identical to the underlying market. Investors enter into CFDs at the underlying market price.
Macquarie offers the direct market access model as Macquarie considers this model offers the most transparent pricing and cost structure to clients.
The worst enimy is yourself. Look into the mirror when trading, and you know what risk is.
You must know
1. How prices are determined by supply and demand.
2. That time value decreases with the square root of time. Very important for at the money options with a few days left to expirity. Sqrt(100) = 10, Sqrt(25)=5, Sqrt(4)=2, Sqrt(1)=1. You must know what that implies.
3. Volaility, try to figure out the swings of the stock you are following over the relevant (frequency and) horizon.
I think Wayne's advice is timely. Trade ordinary shares and become proficient at that first. I don't trade options at the moment but I do know that it can be an intricate and time consuming business. Heed the advice of those that do trade in this area. Have a trading plan in place and know why you are trading / investing and what your financial goals are (beyond getting rich ASAP). Likewise, develop a trading system that work for you. Are you going to use fundamental analysis, technical analysis, a combination of both or something else??? Whatever you do, do your own research before you commit your money to any investment. It is after all your money! Good luck!