CFDs

Day-Trading

Day trading is the practice of taking small bites, or profits, out of the market. A day trader would look to profit from a price move from say $6.20 to $6.22, $6.34 to $6.36 or $6.64 to $6.66. Positions are rarely held overnight but are sold before the market close, and possibly even re-purchased the…

Fundamental Analysis

The fast-paced nature of CFD trading tends to propel traders towards using technical analysis techniques to determine when to buy and sell, but this could be a flawed strategy. While technical analysis per se isn’t bad, combining technical and fundamental analysis is often a better approach. If there is a technical signal to buy, it’s…

Hedging

Hedging is a sophisticated strategy regularly employed by the big end of town such as professional traders and fund managers, particularly hedge fund operators. Many say that CFDs are one of the best hedging tools around, which means that hedging strategies are now available to ordinary investors as well. Hedging your bets can feel a…

Scaling into a position

Most CFD providers recommend the slow and steady approach when entering a trade called “scaling into a position.” So rather than putting the full $10,000 into the initial trade, they recommend placing a small amount in first and then slowly increasing this amount if the trade moves in your favour.

Stop Loss

Most professional CFD traders will not enter a trade without placing a stop loss to halt escalating losses. In brief, a stop loss involves placing a sell-order in the market at a pre-determined price. Let’s say that you bought share CFDs on Rio Tinto at $145. You could put a stop loss at $140. This…

Guaranteed stop loss

Let’s say you buy Oil Search shares for $4.60, and you place a stop loss at 2 per cent away from the share price at $4.51. Should Oil Search shares fall to $4.51, your stop loss will be triggered, closing you out of your trade. But let’s say that overnight, the price of oil fell…

Short Selling

Contracts for Difference (CFDs) are one of the few investments vehicles where loss-making companies, collapsing share prices and stocks that appear in research reports as stocks to sell, can be attractive investment opportunities. The technique of profiting from a price fall is called short-selling, otherwise known as “shorting,” “to go short” or simply “short.” Basically,…

Short Selling

blah