anyone trading CFD. why would anyone trade CFD rather than stock,futures, options, or forex? given the limited capital a investor/trader has to deploy? http://www.cfdtrading.net/
I was also skeptical of these products, but now I think that they could be a good solution to small and mid size accounts 2k up to 50 k when you want to trade index products , commodities and bond futures overnight without leverage and with the flexibility of choosing exactly your size. I realized this with Oanda, the ability to choose your size , scale in and out, can make the difference betwen profitability and unprofitability or can significantly reduce volatility in your equity. However with everything I read on CFD providers, they all seem crooked and I wouldn't know which one to choose. I do not know either if the fact that they are DMA or MM is relevant when you trade indices and commodities nor if it makes a big difference when you trade equities. I see RBS uses Oanda's platform, are they fair ? To trade CFD 's as an alternative to futures, the spreads would have to be reasonable if wider, during overnight trading , i.e. 2 am-8am ET. Where can you get those trading conditions ? For ex. OANDA offers gold with a 30 cent spread which is reasonable but I think it widens in the middle of the night. Also stop gunning should be a rare occurrence, otherwise you would have to do without stops which may negate the benefits of smaller size.
One of the big advantages of trading CFDs is that you can virtually trade any product, including forex, stocks, indices, etc. And all those markets are on one platform and thus it's easy. Secondly, CFD trading provice leverage and thus you need less money to trade. CFDs Trading Guide.
Wrong. Trading UK equities in the cash market means you have to pay Stamp Duty at 0.5%. CFDs don't levy this which is a massive advantage so much so that probably 40% of daily UK stock turnover is CFD related.
well that's not a big advantage, you can trade all these asset classes as futures on one platform . Leverage is not an advantage to most people, only experienced, profitable and very gifted traders can really take advantage of leverage , all the others who marvel about leverage are just amateurs about to have their head handed to them. About the only advantage I see in CFD 's is the ability to trade any size in indices commo etc, and round the clock pretty much, now you only need to find a decent broker, that 's the hard part it seems.
CFDs are ok until the firm you are trading with goes bust, then you can kiss your money good-bye! And let's not forget that the firm you are trading with takes the other side of all of your trades and they control the pricing...hmm...on second thought, they are all honest so you got nothing to worry about.
amazing how little people know isn't it at CMC when I asked them are you guys a bucket shop they couldn't even look me in the eye I shit you not :eek: :eek: