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 of our clients trade oil. The amount of clients trading oil depends on the recent price action and volatility. Clients 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…
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…
Where did CFDs come from, and why the weird name?
Contracts for Difference or CFDs were originally stgeloped in the United Kingdom in the early 1990’s by Smith New Court, a London based trading firm. CFDs were mainly used by the firm’s hedge fund clients to short sell using the benefits of leverage and also to take advantage of the stamp duty exemptions, which were…
Capitalising on price movements in reporting season
I am currently a new trader and I’m playing the Sharemarket Game and over the weeks I closely analyzed all the companies. To my complete surprise one of the companies (Downer EDI) went from -0.81% on the 20 Feb to 14.29% on the 21 Feb and there were no announcements prior to this. The day…
Trading the top 200 Aussie stocks with an eye on the SPI or the XJO, but never both
I have been trying to understand why the SPI and XJO follow the same intraday and daily trajectory. I have asked a number of people but have not yet obtained a satisfactory answer. On any given trading day a multitude of people trade the top 200 Australian stocks, with little or no concern for the…
What does the term scalping mean, and how can a scalper make money on CFDs?
Scalping is a trading technique that involves opening and closing positions intraday in a variety of instruments such as FX, Futures or CFDs; typically “scalpers” will aim to profit from small price movements in their trading positions. They will also tend to trade much more frequently than medium to longer term “trend” following traders. It…
