Does trading based on news and events work?
Event Driven Trading is any strategy that seeks to exploit pricing inefficiencies, occurring when companies are involved in corporate events such as mergers, takeovers, restructures (including share buy-backs, spin-offs and capital returns), de-mergers and lock-up expiries. Traders, who follow event driven strategies, attempt to predict the outcome of a particular corporate event on the security…
What is the 2% rule and why should all traders know about it?
When deciding to enter a trade the most important decision is determining how much to risk on the trade. The 2% Rule represents the actual percentage of a trader’s capital that he or she is willing to risk on a single trade should it go against them. So a trader with $100,000 capital will risk…
CFD traders are using the 80-20 rule – what is this?
There are numerous trading strategies that CFD traders are currently using. Strategies may vary from pairs trading to arbitration plays, portfolio hedging and more complex butterflies. I want to discuss a very basic strategy that many traders are using although there are traders out there that are still oblivious to this strategy. Those of you…
How do I trade oil using CFDs?
Many CFD traders trade oil. The amount of traders trading oil depends on the recent price action and volatility. Traders can trade whatever resource is in focus at that particular time, for example: gold may be the focus for a month or so, and then all the media and trading focus may shift to oil….
Why is it bad for a trader to be requoted?
The term ‘requote’ is driven from a lack of liquidity in the underlying market whereby the client will be ‘requoted’ with a new price for the remainder of the position. The CFD broker will instruct the client that there is insufficient volume in the market for their order and fill at the next level on…
How do I trade CFDs over international shares?
CFDs offer a great way to access and trade a wide range of international shares. Close to 10,000 individual share CFD can be traded from all points of the globe all from the one trading account. CFD traders have the ability to trade share CFDs almost 24 hours a day following the various markets around…
Why do CFD traders go short?
“To short” is a trader’s or investor’s term to short sell a financial product. “To short” is the opposite of going long. Going long is the term used for when a trader or investor buys low and aims to sell higher. Going long is very common and is the standard strategy of investors. “To short”,…
How do you trade Australian shares after hours?
The market opens at 10:00am, and normal trading occurs until 4pm. From 4.01pm to 4.10pm, the market goes into a pre-open phase where investors may continue to enter orders into the market. The ‘Closing Single Price Auction’ (CSPA), determines the closing price of stocks each trading day and this occurs between 4.10pm and 4.11pm on…
What is a stop loss?
A Stop Loss is an instruction for a particular share in your portfolio to be placed for sale on the market when it trades at a pre-determined price. You decide which share you wish to sell, and set an acceptable exit price below the share’s current trading price. Imagine you own shares trading at $10.00…
Why don’t stocks begin trading at the previous day’s closing price?
Like many things in the world, the stock market relies on the power of supply and demand. The stronger the demand for a share in a company, the higher its price will be. Alternatively if less people are interested in buying a share of a particular company, its price will drop. Before the market opens…
