Videos uploaded by user “TradeCFDs”
Beware Very Low CFD Margins
Why shouldn't you regard 'low margin requirements' being flaunted as a selling point by some CFD providers? http://www.contracts-for-difference.com/Low-margins.html A characteristic of CFDs is that they have lower margin requirements than other types of leveraged vehicles. Gearing (leverage) is the degree to which an investor is able to make use of borrowed money. Just keep this in mind: The lender (contracts for difference provider) is focused on maximums whereas the borrower (you!) should be concerned with minimums - borrowing as little as you can but still getting bang for your buck. 'Leveraging on trading instruments means compounding risks and may lead to over-leveraged positions if the trader isn't careful.'
Views: 43037 TradeCFDs
How to Choose a CFD Broker
When trading contracts for difference it is important to choose the right CFD provider. http://www.contracts-for-difference.com/cfds/compare-brokers.html There are a number of CFD providers to choose from, meaning CFD traders have a range of choices, but choice can be confusing. Choosing a CFD provider should come down to a number of considerations other than simply dealing commissions and margins alone although you would be forgiven for believing these to be the most important prerequisites given the emphasis placed on headline-grabbing ultra-low spreads and margins.
Views: 37391 TradeCFDs
Day Trading with Bollinger Bands
Ok, Bollinger Bands http://www.contracts-for-difference.com/course/bollinger-bands-explained.html these are another nice technical analysis tool to use. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Bollinger bands are based on standard deviation; in other forms they form a band or channel around price. As the price volatility increases the range of the band will incease, as volatility decreases the range of the band will contract. The standard setting is 2 standard deviations either side of a 20-day simple moving average (SMA). Standard deviation is a measure of volatility, so Bollinger Bands adjust themselves to market conditions. When market volatility increases, the bands widen, moving further away from the SMA. During less volatile periods, the bands contract and move closer to the SMA. The tightening of the bands is often used by technical traders as an early indication that volatility is about to increase. Traders then look to trade in the same direction of the developing trend if the bands subsequently diverge (widen) sharply.
Views: 5550 TradeCFDs
Could I become a Millionaire by Trading CFDs?
Millionaire trader? http://www.contracts-for-difference.com/Millionaire-CFDs.html Trading with the expectation of generating a million, or any specific amount is dangerous. If you are focused on a "need" to make a certain amount of money, such as £1,000,000, this may in itself put you at a disadvantage, as it would make you prone to trading in desperation and/or taking too much risk. I'd suggest you take a hard look at whether you're genuinely interested in what causes market phenomena and/or trading itself, and if you are, then focus on that rather than on a specific financial goal; if not, then you might want to reconsider, or else it may substantially contribute to your odds of going broke -- or even indebtedness.
Views: 59898 TradeCFDs
Greg Riba - Former Floor Trader
Greg Riba, a former floor trader interviewed whilst drunk (?) gives some very insightful thoughts about trading and the financial trading industry.
Views: 7366 TradeCFDs
Rules, Tips and Secrets for Successful CFD Traders
What do the successful CFD traders http://www.contracts-for-difference.com/ do differently? Some of the rules that successful day traders use are familiar to all traders. Others may be contrary to the common beliefs. Rule 1: Don't follow the crowd Rule 2: Block out other opinions Rule 3: When you're not sure, stand aside Rule 4: Try to avoid market orders Rule 5: Trade divergence between related commodities When trading commodities, watch the 'families': grains, the meats or the metals. When you spot a wide divergence in a group, it could signal a trading opportunity. For example, if all grains except soybeans were moving higher, sharp traders would look for an opportunity to sell soybeans as soon as the grains in general appeared to be weakening. The reverse of this is true also. The traders would buy the strongest commodity in the group during periods of weakness. Rule 6: Trade the opening range breakout This is a good price-direction clue, particularly after a major report. A break out of the opening range may tell you the direction of trading for the day or the next several days. If the market breaks through the opening range on the high side, go long. If it breaks out on the bottom side of the opening range, go short. Rule 7: Trade the breakout of the previous day's range This rule is used by many successful traders to decide when to establish or lift a position. It means never buy until the price trades above the previous day's close, or never sell until the price trades below the previous day's close. Momentum traders commonly use this rule as they believe that the weight in the market is in their favour when they wait for trading to break out of the previous day's trading range before adding to their position. Rule 8: Trade a weekly breakout This rule is similar to the daily rule, except it is used on weekly highs and lows. A break of the weekly range can be seen as a signal of the trading direction for several weeks to come and can therefore be considered a stronger signal. Rule 9: Trade a breakout of the monthly range The longer the period you're watching, the more the market momentum behind your decision. So monthly price breakout are an even stronger clue to price trends and are vitally important for the position trader or hedger. When the price breaks out on the topside of the previous monthly high, it's a buy signal. When the break out is on the bottom side of a previous monthly low, it's a sell signal.
Views: 47857 TradeCFDs
Most Reliable Continuation Patterns: Bull and Bear Flags
This tutorial features bull and bear flags , one of the more common continuation patterns on stock market charts - this tutorial will show you how to tell when a share is going to go up, allowing you to make money from shares. First, why should you be interested in continuation patterns? If you can see that the price is already going in a certain direction, why do you need to have confirmation of it? Certainly, continuation patterns are less emphasized than reversal patterns in trading literature. However, they do have a use. If you are already in a trade on the stock, they provide reassurance that the trend will continue and that you can stay in position, expecting greater returns. Also, if you missed out on getting in on the trade at the start of the trend then a continuation pattern is a good place that you can open a trade with confidence, and capture the rest of the move. That said, what are the most reliable continuation patterns? Arguably, they are the flag patterns, which are temporary retracements in a strong trend. For instance, the bull flag pattern occurs in a strong uptrend. It is when the price reaches a high point, and consolidates in a retracement which is slightly downwards. Often you can draw a trendline and channel line either side of the retracement, and these parallel lines form what is called the "flag". After a short retracement, the trend usually resumes strongly. Similarly, you may find bear flag patterns in a downtrend. These can be seen where there is a strong downtrend, which hesitates and retraces back upwards for a short distance. The consolidation represented by this movement against the trend is called the bear flag. It will normally be followed by a continuation of the strong downtrend. Sometimes the flag patterns are also used to give an indication of how far the trend has to go. Frequently, the trend continuation will go at least the distance of the trend move before the pattern. In other words, the pattern occurs in the middle of the trend. A flag pattern will usually last between the one and three weeks, and can be regarded as a pause in the trend. It will usually come after a particularly sharp move in the trend, and is almost as if the price has to catch its breath before charging onwards. It is perhaps because the trend is so strong before the flag that the pattern is considered reliable. It would be extremely unlikely that the trend would reverse after the flag. For confirmation of the flag pattern, you should also look at the volume of trading. You will see a big drop in volume during the course of the flag as the pattern develops. When you come to the end of the pattern, there should be a good increase in volume as the price breaks out. The characteristics of the flag pattern are that it is slightly countertrend, and it can be contained within a pair of parallel channel lines. It is a short-term pattern, and a strong indication that the trend is set to continue for some time.
Views: 9320 TradeCFDs
How to Day Trade with Keltner Channels
How to Day Trade with Keltner Channels http://www.contracts-for-difference.com/course/cfd-guide.html You can't look at Bollingers without at least taking a look at Keltners. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! I think Keltners are under-utilized yet they can be very useful for us traders. Rather than contracting and expanding so violently like Bollinger Bands do Keltners don't do that and often price will go above or below a Keltner channel for a long period of time because of the nature the formula is derived. You use it in the same manner that you use Bollinger Bands; you sell the High, buy the Low and when you are in a trending environment
Views: 6759 TradeCFDs
What Moves A Currency?  Why Currency Rates Move...
What affects foreign exchange rates? http://www.contracts-for-difference.com/markets/Forex-CFDs.html If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! Foreign exchange rates are affected by multiple fundamental reasons as international trade and investment causes movements in the foreign exchange markets. Will the dollar crash? Will the Chinese yuan be the next world leader? You may have encountered foreign exchange rates mostly when considering your holidays, when you change your pounds into the local currency, and back again when you return. Sometimes, you may find a big difference between one year and the next in how much foreign currency you can get for your money. As with all markets, foreign exchange and the relative value of currencies is affected by supply and demand. Having said that, demand is the main driver of foreign exchange rate changes. An abundance of supply of a particular currency doesn't really cause people to buy more of it, whereas an increasing demand will force the rate up. Much of this demand is caused by international trade, for instance Japanese cars imported to the UK will be paid for with pounds sterling, but this money will be converted into Japanese yen to pay the manufacturer who has to pay his workers and suppliers. This then causes you to consider the trade balance. Obviously it is not a stable situation if one country buys goods from the other, and there is no corresponding foreign exchange in the other direction. The currency which is being used by the buyers to pay for the goods, in this case sterling, cannot forever be paid out to buy Japanese yen with no compensating currency exchange back. This situation is to some extent self-regulating. The buying currency will decrease in value, and the currency of the producing country will increase relatively. Before too long, the price of Japanese cars in the UK would have to rise, and this would reduce the demand, cutting back on the trade imbalance. Different countries have different fundamentals. Some countries are rich in the natural resources that are needed for production. These countries include Canada and Australia. Other countries have less in natural resources and take on the role of the producers, buying in raw materials and shipping out finished products. Although political influences can have short-term effects, in the long term the economic forces are more significant in determining the fortunes of a currency. Certainly political instability can make the world markets hesitate, with investors wary of buying the currency, but it's how efficient a country is at extracting natural resources and/or manufacturing that will ultimately impact how its currency is viewed globally. Another governmental decision that has some effect, although not in the long-term, is that of the central bank interest rate. When interest rates differ between various countries, there is an obvious pressure for the exchange rate to compensate. Without a drift in exchange rate, investors in the lower interest rate country would have a no risk way of increasing their income by buying the other currency, putting it into a savings account there. Finally, whenever there are crises in the world, you will note that there is a flight to what is regarded as a quality or safer currency. Typically, investors will buy US dollars or other major currencies, on the basis that the value is more likely to be retained.
Views: 7655 TradeCFDs
Why is the Volume Weighted Average Price (VWAP) is so Useful for Traders
How to Trade with the VWAP . http://www.contracts-for-difference.com/strategies/Moving-averages-cfds.html If I have only one indicator it would be the VWAP i.e. Volume Weighted Average Price indicator. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Why is the VWAP so valuable? Why is that? The volume weighted average price indicator is one of the most under-utilised trading indicator out there. The VWAP is a moving average but its based on volume so its showing you where more people are engaged and involved. Institutions are looking for the VWAP for several reasons; for one thing some institutional computer algorithms have the VWAP coded into their trading systems; I also know traders are following it. The VWAP reacts to price movements in relation to the volume traded during a given period.
Views: 22187 TradeCFDs
Spread Betting versus CFDs Trading
Trading in CFDs is often compared with spread betting http://www.contracts-for-difference.com/compare/cfds-vs-spread-betting.html and it is important to make a distinction between the two. First, let's take a look at their similarities.
Views: 4000 TradeCFDs
Day Traders: Habits for Successful CFD Trading
A job as a day trader http://www.contracts-for-difference.com/ is a great way to make money in a very lucrative field. It is not, though, an easy way to get rich quick. In this presentation we look at some top tips from successful CFD traders. Rule 1: Build a trading pyramid Rule 2: Avoid entering your entire position at one price Rule 3: Never add to a losing position Rule 4: Cut your losses short Rule 5: Let profits run Rule 6: Learn to like losses
Views: 9229 TradeCFDs
Trendlines and Channels: How to Draw and Use them for Trading Decisions
Trendlines and Channels: How to Draw and Use them for Trading Decisions http://www.contracts-for-difference.com/course/trends.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN CONTINUE PRODUCING MORE Drawing Trendlines and Channels - Price Action Analysis. Using and Drawing Trend Lines. A lot of people like to use trend lines - many traders like look at their charts to analyse how strong a trend is. We all know what a trend is. But how do we analyse a continued trend and how do we pick levels to trade?
Views: 5212 TradeCFDs
What drives Commodity Price Changes?
What affects Commodity Prices? http://www.contracts-for-difference.com/markets/Commodity-CFDs.html If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! This article features factors that affect commodity prices - just what does cause the price of wheat gold and oil to fluctuate? Find out by clicking the above link to see all of the factors that change commodity prices. If you want to trade on the value of commodities, you can do so in several different ways. There are spot and future markets, but most traders will use a more convenient tool, such as spreadbetting, in order to play on the volatility of commodities. There are many companies that are heavily dependent on particular commodities. For instance, petrol refineries need crude oil, and this price typically changes. So you can expect the price of crude oil to have an impact on the share price of companies like Royal Dutch Shell and BP. Even if you do not trade commodities, this is a reason you may be interested in what causes commodity prices to change. And put simply, the old standby of the economist, supply and demand, govern all the fluctuations in pricing of commodities. This is not to say that supply and demand are equally important for all types of commodities. For instance, some are more dependent on supply, whereas others have a dependency on a varying demand. Consider agricultural products. These include products like wheat and corn. You're probably not going to see a big change in demand for these products, so much as you are going to see large changes in supply. These would result from crop failures and disease, weather conditions, etc. On the other hand, the supply of metals such as gold and platinum is fairly steady at any particular time. A more powerful factor in the pricing of these is how much demand there may be, and demand changes result from increasing industrialization in Third World countries, making these metals more desirable to the population, and from societal aspects such as inflation that tend to change the attitude towards precious metals. It is worth noting that the price of commodities in certain groups tends to move up and down in tandem. In the precious metals, gold, silver, platinum, and palladium would all tend to go up and down together in value. It is unlikely that you would see the price of gold fall and the price of palladium soar at the same time. Similarly, if you consider grains such as oats, corn, and wheat, these prices are likely to move in concert. To some extent, each can be a substitute for another. If the price of oats goes up, then farmers may buy more corn to feed their livestock, and this increase in demand for corn makes that price rise too. Although we are talking about commodities, you can also see this in effect in some stocks and shares. As an example, you would usually see the shares of banks such as RBS and Barclays going up and down together, unless there is a particular scandal or revelation about one of them. It is because of this that many traders limit the amount of exposure in any particular market sector. Diversifying by buying into different companies does not give diversfication if all the companies' shares rise and fall together.
Views: 5943 TradeCFDs
CFDs and Dividends - What Happens?
Do you receive dividends when you hold a CFD position? http://www.contracts-for-difference.com/ This is something that confuses some traders. You'll often hear people talking about dividends being paid on the shares for which they hold CFDs. In actual fact, the situation is more straightforward than if you were to hold the shares themselves, and the basic principles are easy to understand. Net dividends on CFDs are credited to long trades while gross dividends are debited from short positions held at the end of the trading day before the ex-dividend date. Payment is usually credited or debited to your trading account on or around the ex-dividend date.
Views: 30433 TradeCFDs
Cutting Your Losses - Trading Rules to Live By
Cutting Your Losses - Trading Rules to Live By http://www.contracts-for-difference.com/ If you've enjoyed this video, please click the like button below and share it with your friends and remember to SUBSCRIBE! It's been mentioned before, and the old adage "Cut your losses and let your winners run" has a lot of truth. Some would argue that letting your winners run is not always the right policy, but almost without exception it is always correct to cut your losses. For some reason this is a very difficult lesson for novice traders to learn. It goes against your human instincts, and that is why it is hard. You see, what is your first thought if you have carefully studied and prepared a trade, taken a position, and then the market runs against you? Your first thought is that you have done something wrong, that you must have misjudged something or misread an indicator. The last thing you want to do in this situation, psychologically, is to close the trade and accept your loss, as this feels like a failure and we all want to avoid failure. If you keep the trade open and hope for it to turn around, then at least you don't have to feel that sense of failure immediately, and there is a slight chance that you won't have to feel it at all. These are instincts which work against you. Once you have identified that the trade is losing, then you should not cut it any slack but simply close it and go on to the next trade. The market does not care what you think it "should" do, but simply gives you the playground for you to make the best of it. If you do not cut your losses swiftly every time, then in a short time you will not have sufficient funds for trading any more. There is an additional reason why you need to do this, just as professional traders do. Think about it in these terms. You and many other traders thought the price was going up, bought into the position, and then found that the price went down. Those traders who are experienced and operating professionally will see this, and will immediately cut their losses, selling the position. What you think will happen if you hang on, hoping for that turnaround? The price will be affected by supply and demand. The professional traders sell quickly, which increases the supply and reduces the demand. The net effect of this is to reduce the price further. If you are sitting there hoping that the price will turn around, the odds are that you will see exactly the opposite effect because of the actions of the professionals. The feeling of failure or being wrong is one that every trader has to deal with. You need to learn to ignore this human emotion, and realize that you do not have to carry blame for every trade that goes the wrong way. If you made the trade in accordance with your strategy, and your strategy is sound, then you should congratulate yourself for sticking with your plan regardless of the outcome. Simply learn to accept that trading is a percentage game, and that you will have both winners and losers.
Views: 1574 TradeCFDs
What are CFDs: Basic Guide
Contracts for Difference or CFDs http://www.contracts-for-difference.com/cfds/compare-brokers.html were developed to manage investment risk but can also be used to accelerate your investment performance. CFDs are leveraged products which mean they carry a higher level of risk to your capital than normal stock market investments, like traditional share dealing. CFDs let you speculate on share price movements without actually buying the share. Essentially it is an agreement between an investor and a provider to exchange the difference between the opening and closing price of the contract. So if the share increases in value, you will receive the value of that gain. However, if the share falls in value, you will lose an amount equal to that drop. Find out more about CFDs by visiting http://www.contracts-for-difference.com/ Risk Warning: This video is for general information only and is not intended to provide trading or investment advice or any personal recommendations.
Views: 9691 TradeCFDs
Frank Crumit: A Tale Of The Ticker (1929 Stock Market Song)
A 1927 song about the stock market. I am sure it is as relevant today as it was then, reminds me of OPES and Tricom. The song was recorded by Frank Crumit and is titled: “The Tale of the Ticker”. Enjoy it. Frank Crumit (September 26, 1889 -- September 7, 1943) was an American singer, composer. radio entertainer and vaudeville star. You want to be a Share Trader? Treat it like a Business http://www.contracts-for-difference.com/course/trading-as-a-business.html
Views: 2273 TradeCFDs
But what is Slippage in CFD Trading?
In stock market trading there two kinds of slippage. http://www.contracts-for-difference.com/ One is real and one isn't. In general, slippage is defined as the difference between a price determined by the trader, and the price that actually occurs on the exchange floor. The term 'slippage' makes reference to a failure to meet expectation with regards to the execution of an order. Slippage is represented by the difference between a trader's estimated transaction costs and the amount really paid due to market conditions or poor execution by the broker or CFD provider.
Views: 1596 TradeCFDs
Using CFDs to Hedge Share Positions
Hedging. http://www.contracts-for-difference.com/strategies/CFDs-hedge.html A common trading strategy, and a useful one in times of market turmoil makes use of a hedge to protect a single share position with a contract for difference. CFDs are especially useful as a hedging tool because a short position can be replicated to hedge the exact position size required. For example, you may have a long term share portfolio that you know you want to keep hold of, but you are worried that it may lose value in the short term, because you think the markets are heading down. You can take out a CFD that could profit on a drop in the share price and help offset the loss on the physical holding. When to get involved -: • when the wider market or a particular stock you are invested in is moving against you. • when a market position has already moved sharply in the direction of your trade and additional gains may be marginal. • when the wider market looks weak and doesn't react to positive or negative news. When to avoid CFD hedges -: • when a trade has moved sharply against you the market is prone to reversing and where hedging near these levels all you would be doing would be locking yourself into a large loss. • avoid hedging in general raging bullish markets when everything seems to be going up. Hedging using CFDs is quite simple as these contracts have a one-to-one relationship with the underlying -: If you have 6,000 shares of Microsoft and would like to cover your full exposure via a CFD, all you would need to do is to sell 6,000 CFDs of Microsoft with yoru provider. If you only want to hedge just half you could sell just 3,000 CFDs,
Views: 24246 TradeCFDs
Scaling Into A Trade As It Goes In Our Favour:  Pyramiding into Winners
Scaling into a trade as it goes in our favour. http://www.contracts-for-difference.com/tactics/Basics.html You might say 'I want to get more aggressive when things are on my side'. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! How can we do that? Averaging down does get a bad reputation and this is normally a bad idea if you do it without a plan but averaging into positions with a plan is sound. If you've spotted momentum, scaling in does help to extract more value from your initial trade.
Views: 788 TradeCFDs
City Index: CFDs Explained
CFDs Explained by City Index Staff http://www.contracts-for-difference.com/ What are CFDs?
Views: 4039 TradeCFDs
Trading Strategy: How To Scale In and Out of Trades
Let's talk about scaling in and out of trades in terms of targets. http://www.contracts-for-difference.com/tactics/Basics.html I remember once hearing that scaling constitutes inferior behaviour but I believe scaling makes sense in certain situations. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! I'm a massive fan of scaling; very rarely I go in 'all in' or 'all out' of a position because very rarely can you get it perfectly right. Having said that I still encounter people who think that scaling is a waste of time so to each, his own - and everyone is entitled to his opinion. But I think it makes sense as you give yourself the opportunity to profit from an extended move.
Views: 2206 TradeCFDs
Overbought Or Oversold? Using The Relative Strength Index to Find Out
Relative Strength Index applied to CFDs and Trading http://www.contracts-for-difference.com/course/relative-strength-index.html Relative Strength Index (RSI) Let's talk RSI i.e. Relative Strength Index (RSI) is a momentum indicator but it is also an oscillator; an oscillator means that it oscillates between a high and a low ceiling. You may think this is a misnomer, as ‘relative’ normally means relative to something else, such as the sector or overall market. Relative in this case means the stock’s movements relative to itself and its previous performance. Fortunately, charting software works it out for you, but it’s figured from the average up move divided by the average down move over the specified time period (often 14 days in trading software). As an oscillator, it can go between 0 and 100%, and significant values are 30% and 70%, although some stocks go to 20% and 80%.
Views: 972 TradeCFDs
Commodity Trading.  Which are the Best Commodities to Trade?
Which markets to trade? Trading Commodities. http://www.contracts-for-difference.com/markets/cfd-markets.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! So commodities we have the obvious ones like Gold, Crude Oil, Silver, Cocoa, Coffee, Platinum..etc. There are two types of traded oil; West Texas Intermediate (WTI) which is the USA crude and Brent Blend. Both follow each other closely although they do diverge at times. Traditionally OPEC and global demand dominated the Oil markets but the shale oil industry revolution in the USA is changing the landscape. Gold and Oil are the most common traded commodities - and have quite tight spreads which is good for both swing trading or day trading. Oil has recently experienced some wild moves. Gold has been quiet recently but we've experienced some sharp moves in Gold in the last few years as well. Silver is more volatile than gold although they do tend to follow each other. Copper is a very industrial based markets and depends on the demand in China and emerging markets in particular. The point is that you need to find something that suits you. Commodities like cotton and orange juice for instance are less traded and are likely to have wider spreads. If you are looking to day trade such markets the size of the bid-offer spreads is very important.
Views: 1767 TradeCFDs
CFD Trading at IG Markets: TV Commercial
Contracts for difference and CFDs http://www.contracts-for-difference.com/igmarkets/Igmarkets-review.html offer all the benefits of trading shares without having to physically own them
Views: 5128 TradeCFDs
Trading Sugar using CFDs
Commodities which are grown such as sugar are known as soft commodities http://www.contracts-for-difference.com/markets/Trading-Sugar.html, while those that are extracted are known as hard commodities. There are a number of factors that influence the price of sugar. While government trade policies are the main influence on the price of sugar, weather is an important factor too, making the price of sugar subject to sudden fluctuations. Over 3/4ths of the total sugar produced is consumed domestically in the countries in which it is produced, and the rest is traded around the globe which is often termed as World Sugar.
Views: 1390 TradeCFDs
Profit Taking Techniques for CFD and Stock Market Traders
Profit taking trading strategies http://www.contracts-for-difference.com/ If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! Some people say that you won't go bust taking a profit but you really need to be careful because you also have to look at your risk/reward ratios and your winners have to compensate your past losses. Initially when you buy there is about 50% chance of a trading going up or down, so you should be getting about half your trades right - correct? Unfortunately it doesn't work that way in practice because losing trades are stopped out (with stops) while we are just too keen on taking profits.
Views: 1973 TradeCFDs
IG Markets: Risk Management Using Orders
Risk Management Using Orders web seminar by David Jones of IG Markets. http://www.contracts-for-difference.com/ccount/click.php?id=11 What are Stops and Limit Orders? Trading with Stop and Limit orders. Stops and Limit orders are and how they operate. It's designed to help you develop an approach to risk management that will suit your unique style of trading.
Views: 16361 TradeCFDs
Why Copper and Oil are Important Economic Indicators!
Why Copper and Oil are Important Economic Indicators! http://www.contracts-for-difference.com/markets/cfd-markets.html If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! You might think that the price of crude oil and of copper is only important if you are trading commodities or futures. If you are simply trading in the stock market, there does not seem to be any direct relevance. It is true that there is no direct impact between copper and oil prices and the stock market, but you can draw certain inferences if you keep an eye on how the prices are doing. Take for example copper. Where is copper used? Typically, copper is used a lot in construction, for electrical wiring, as well as in producing other industrial goods. This means that if there is a large demand for copper and therefore a strong price, you can usually expect it to have come about as a result of an expanding economy. The opposite is not completely true. If the price of copper is falling, this does not mean necessarily that the economy is stagnant, but it does give a warning sign that the economy may be slowing. Inevitably, there is a time lag between one market and the other. What then of crude oil? Once again, this is not directly related but watching the price of oil can give you inferences about the performance of other markets. A booming economy will generally push up the price of oil. One reason for this is that a booming economy means more transportation of goods for sale, as well as people taking personal journeys of choice using oil products. There are other reasons that oil prices can go up. For instance, uncertainty in the Middle East typically makes the oil markets nervous as supplies may be threatened. Another reason for increasing oil prices is a particularly hard winter, which has consumers buying much more heating oil. The volatility in the price of oil is well known, and some traders spend their lives simply trying to follow the impact of different factors. You have to bear in mind the overall situation when you try to draw inferences from oil prices. One thing that is more certain is that oil prices going up will tend to depress the stock market. This is for several reasons, all to do with manufacturing. Some goods directly use oil products in the manufacturing process, producing plastics, etc. Increasing energy costs place a greater financial burden on manufacturing, which will tend to push down the value of shares. As pointed out above, much of the transportation and distribution of goods for sale depends on oil products, so an increasing oil price will cause more expense, reducing companies' profits and causing share prices to weaken. What is clear is that when you are trading you need to look closely for interrelations between the various markets. Even outside the obviously correlated factors that we have looked at previously, you will find that you can learn a lot about how you expect your chosen trading market to perform by keeping an eye on other markets, and by drawing the appropriate inferences from the way that they are trending.
Views: 581 TradeCFDs
10 Tips for Trading Contracts for Differences
Here's 10 CFD trading tips http://www.contracts-for-difference.com/tactics/Basics.html to bear in mind when you're trading contracts for differences or shares trading for that matter. Do's and Don'ts. Contracts for difference are a great, flexible trading instrument. But you need to have a well-honed techniques to trade them. If you have reasonable CFD trading skills, a good trading system, and prudent money management, trading offers you great potential for profit.
Views: 8677 TradeCFDs
IG Markets CFD Trading Explained
CFDs Trading Explained by IG Markets http://www.contracts-for-difference.com/igmarkets/Igmarkets-review.html What is a CFD? CFDs stands for contracts for difference and is one of today's fastest growing trading instruments. A CFD is a contract made between two parties - you and the CFD provider.
Views: 2803 TradeCFDs
Factors that affect the Housing and Property Markets
Just what affects house prices? If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! This is a detailed economic lesson on factors that determine house prices and whether property is a good investment. We look at the UK housing market and compare it to Germany. There are many factors that affect the price of a house and we explore many in this economic lesson. You may disbelieve the headline, but it depends how you decide to evaluate house prices. Of course, the cost in pounds sterling of houses has risen significantly over the decades, but this is really just a demonstration of the fall in value of the pound, rather than the increasing value of houses. We can show this by considering what it costs to buy a house in terms of commodities. If you look at the value of the house as ounces of gold, or as gallons of petrol, then house prices have hardly changed since the middle of the last century. Price is relative, but you might think that increasing labour costs would have impacted the expense of building a house. Leaving out the cost of the land, the building cost for a house breaks down to approximately 50% labour and 50% material. Labour has gone up relatively, but material has gone down because of things like industrialization, which means that the bricks can be made in much greater quantities and more cheaply. Each country and each society has various factors that affect house prices. Take for example Japan. The price of houses in Japan skyrocketed, so that they were no longer affordable. The answer to this which the Japanese adopted was to develop a three generation mortgage. The commitment to pay a mortgage could last as long as 100 years, and be bequeathed down to offspring. Alternatively, consider the case of house prices in Germany. While Germany is a rich economy and you might expect house prices to reflect this through inflation, the price of houses in Germany has been relatively flat in monetary terms compared to other Western countries such as the UK and USA. The reason for this may be because there is less speculation in houses in Germany, and they are not regarded in the same way. The homeownership rate is only 43%, and people tend to stay in the same place for longer. Another disincentive to buying and to moving is that costs are about double those in the UK. A typical buyer in Germany will pay about 8% of the purchase price in fees. Add to this the customary practice of putting down 30% - 35% as an initial deposit, compared to around 10% in the UK, and you can see that the housing market is naturally a lot cooler. There are some other factors for housing in the UK that might result in a creep upwards in real cost. Demand is noticeably increasing, as immigration is up. Breakthroughs in healthcare mean that people tend to live longer, and consequently there are less houses coming onto the market, reducing the supply. The third factor is the societal norm of a lower occupation level. Some decades ago, families tended to stay together and live in the same house. Now it is more likely that there will be few people in living in a house, particularly given divorce rates and the required mobility of labour. All these factors will increase the demand.
Views: 1245 TradeCFDs
How to React to False Breakouts to How to Tell a Breakout from a Fakeout
Using False Breakouts to Your Advantage in Day Trading: How to React to False Breakouts http://www.contracts-for-difference.com/course/cfd-guide.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN CONTINUE PRODUCING MORE We've covered horizontal support and resistance, trendlines - let's now look at higher timeframes. Now we can see what is going with the USD/JPY. Sometimes we get false breaks; the market looks like itis going somewhere but it doesn't. Trading is not a game of perfect; you can't catch all breakouts...
Views: 1010 TradeCFDs
Trading Strategy: Scalping with CFDs
Nothing compares to scalping it comes to excitement, and contracts for difference http://www.contracts-for-difference.com/strategies/Scalping-cfds.html are a great way to take part. Scalping is a trading style that's particularly suited to CFDs, thanks to their lower transaction costs. Scalping is a way of trading where you take small consistent profits, cutting your losses quickly when necessary. Scalpers take frequent gains from small price fluctuations and trades, are often exit them shortly after they've become profitable.
Views: 954 TradeCFDs
Cost of Holding CFDs: Financing, Charges and Dividends
Overnight financing and dividends. http://www.contracts-for-difference.com/CFDs-dividends.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Cost of Holding CFDs: Financing, Charges and Dividends If you had a position overnight you need to pay a financing fee. A charge to 'borrow' the money required for the position value. This is a percentage of the notional size of the position (typically 2.3% per annum / 365 per day) Day traders don't carry positions overnight so they won't have to worry about financing fees - in which case only the spread cost is relevant. When we are shorting, we are credited with the interest charge however when interest rates are low this is often debited Example: 10 contract on the FTSE Long @ 6700 Notional value = GBP67,000 Financing rate is LIBOR (0.5%) + 2.5% per annum Cost to hold position overnight = (GBP67,000 x 3%) / 365 = GBP5.50. Dividends are treated differently for with each broker but generally; 80% of the dividend credited if you are LONG. 100% of the dividend debited if you are SHORT
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CFD Trading Terminology: How To Understand CFD Jargon (Long, Short, Stop Etc.)
CFD Trading Terminology http://www.contracts-for-difference.com/course/cfd-terminology.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Going long is buying a stock or index (a bullish trade) Short is selling a stock or index (a bearish trade) Stake - How many contracts you want to trade? Tick - The minimum increment of movement Underlying - The asset which your CFD is based on Quote - The buy and sell prices for an instrument Mark to market - Open trades are referenced against Leverage - Gearing or margin LIBOR - London Interbank Offer Rate (commercial interest rate)
Views: 825 TradeCFDs
What Are CFDs?
What Are CFDs? A CFD stands for contract for difference. http://www.contracts-for-difference.com/What-is-a-contract-for-difference.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! It is a contract between you and the broker agreeing certain paramaters. Example, you agree to pay the broker the negative difference between the buy and sell price of Tesco shares. He agrees to pay you any positive difference. You don't get any voting rights with cfds. If you're trading an asset, the price will track the underlying asset - the value is based on the underlying asset.
Views: 2015 TradeCFDs
IG Markets: Trading with Charts
Trading With Charts web seminar by David Jones of IG Markets. http://www.contracts-for-difference.com/ccount/click.php?id=11 This seminar will suit novice and advanced traders alike in making you familiar with our professional charting software. Various charting techniques will be covered, including accessing over 70 indicators for technical analysis, setting up alerts and even backtesting. Key features covered include Drawing on the charts, Fibonacci levels, Placing over 70 indicators, Backtesting and Saving layout templates
Views: 14259 TradeCFDs
What Is a Stop Loss & Trailing Stop Loss?
What Is a Stop Loss & Trailing Stop Loss? http://www.contracts-for-difference.com/ If you've enjoyed this video, please click the like button below and share it with your friends and remember to SUBSCRIBE! You may think that the title of this article is a trick. After all, the stop loss is there for a purpose and you should never reconsider its placement after you have established it. If you suddenly decided to set your stop loss lower just because the price was coming down to it, then you would be taking away the whole purpose of having the stop loss, which is to reduce the amount that you can potentially lose on a losing trade. However, there is a time when you should consider moving your stop loss. It occurs if you have a winning trade, and you will be moving your stop loss up, towards the price. If you have a winning trade and the price has risen sufficiently, then you can move your stop loss up to your entry price and that guarantees that you will not lose on the trade. You should be careful not to do this too quickly, as you have to allow the price its normal volatility. If you raise the stop loss too high, the price could fluctuate and take you out of the trade while it still had potential to make more money. However, having figured the distance of the stop loss from your entry point at the start, it is quite in order to raise your stop loss to the entry as long as the distance is no less than when you started. Going on from this, if your trade continues to profit you can move the stop loss up again, and this will seal in profits, rather than simply ensuring that you break even on the trade. If you have studied the types of order that your broker offers, you may have noticed that there is usually an order available that will do this automatically for you. It is called a trailing stop order. A trailing stop order is a moving stop order that follows a set distance below the price. The clever thing about it is that it never goes back down, regardless of what the price does. You can think of it as being on a ratchet, locking higher and higher as the price increases. The effect of this is to automatically lock in profit at an increasing level while the price continues to rise, and then never give back the amount of profit that has been secured if the price falls. It does all this without any further intervention on your part. This is a very efficient way of monitoring and maximizing your trade. It is true that the position will never be closed out at the highest price reached, as the price must always come back down to the trailing stop before the trade is exited; but there is no trading method that will guarantee you closing a trade at the highest price, so this is a good substitute that works well in many situations.
Views: 429 TradeCFDs
Trading Gold with CFDs
Trade Gold CFDs http://www.contracts-for-difference.com/markets/Gold-CFDs.html Gold contracts for difference are amongst the most commonly traded and the most liquid commodities you can trade. The advantage of this is that the spread is tighter and you should be able to enter and exit positions easily irrespective of the trade size. The tick size for Spot Gold is 0.1, so if Gold moves from 1071.20 to 1072.20, that is equivalent to 10 ticks. Here's an example of how gold CFDs work. Say that gold is quoted at $1071 to $1071.50.
Views: 373 TradeCFDs
Margin and Trade Financing Workings: Calculating the Notional Values for a CFD?
Margin and Trade Financing; Cost of Holding CFDs: Financing, Charges and Dividends. PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! Margin is the deposit required to fund a trade expressed as a percentage of the notional value. Example: Buby 10 CFDs @ 6540.5 Notional value is GBP65,405 Margin requirement is 1% The money required in your account to fund this trade: GBP654.10 - Margin is lower on Forex, Indices, Commodities (0.5% - 2%) - Margin is higher on shares (5% - 25%) - But notional is lower for the same relative exposure If you are trading an aggressive volatile tech stock it is not unusual for it to move 5 or 7% in a single trading day and that's why brokers require a bigger deposit on such stocks.
Views: 365 TradeCFDs
Analyzing Chart Patterns: Stock Market Chart Diamond Formation
The diamond formation http://www.contracts-for-difference.com/course/cfd-guide.html is not strictly a continuation pattern. In fact, it can be followed by either a continuation of the previous trend or a reversal. It is really a pattern you should watch out for, knowing that something dramatic will occur as it closes. The diamond formation is a portion of the chart where the price fluctuations expand and then contract, forming the image of a diamond on its side. You can draw lines connecting the high points, first rising and then falling, and connecting the low points, first falling and then rising. It is a very rare pattern to see, but worth knowing so that you know what to avoid and what to look for. As with the triangle patterns, the diamond pattern means that the price is being squeezed into a smaller space, and it must resolve with a breakout in a short amount of time. You can try looking at the volume of trading in both up and down directions to get an indication of which way the price will break out, but you would be wise not to trade on this pattern until you see the breakout. The breakout is signalled by a close outside the pattern. With most patterns, there is a way of determining a price target once the breakout occurs. With the diamond formation there is no such a measuring method, and you will find that the breakout is usually quite strong. The importance of the diamond formation can be determined from how long it has continued. The longer the diamond, the more important its impact on future prices. What you're seeing with the diamond formation is firstly a battle between the buyers and sellers, with each taking control in turn, caused the broadening of the price fluctuations. This starts the initial tension in the trading market which is to be subsequently realized when the breakout occurs. You can imagine that the buyers and sellers are each trying harder to control the market, as the price fluctuations reduce. As soon as the price goes in one direction, the opponents of that direction jump on the trade to force it to stop. Say the price is going upwards, with buyers trying to control, then sellers jump into action, increasing the supply of the stock and thus keeping the price from going too high. When the price is going downwards, indicating that sellers are strong, buyers see this as an opportunity and buy in, and this arrests the downward movement. So there is a lot of tension building up within this constrained pattern. Eventually, either the sellers or buyers will win, and force a sufficient price move that the price breaks out of the pattern. Once the breakout is clear, all traders who have been following the security will be quick to take their positions. If the breakout is upward, then traders will seek to buy, and this will force the price to increase rapidly. If the breakout is downward, then there will be a swift selloff, bringing the price crashing down.
Views: 559 TradeCFDs
How to Trade Wheat CFDs
Wheat CFD Example You bought 1 CFD contract for wheat at the price of 520 cents per bushel and sold it at the price of 522 cents. The difference is 2 cents. One CFD contains 5000 bushels (like in a standard exchange contract, for example, on the CME Group). So, your profit is 5 000 × 2 cents = 100 dollars. Long position (purchase) An investor decides to buy Wheat CFD quoted 515 (bid)/516 (offer), and buys 5 contracts at the price of 516 cents per bushel (let's recall: 1 contract contains 5,000 bushels of wheat). - Buy price of wheat is 516 cents - Quantity of contracts is 5 - Value of 5 wheat contracts is 129000 (5.16*5*5000) - Margin required is 8000 US dollars (2300*5) - Investor freezes only 8000 dollars on the account in order to get control over wheat in the value of 129000 USD Position closing Five days later wheat is quoted 525/526 cents per bushel, and the investor decides to close this position by selling an identical set of contracts, namely 5 contracts. The investor sells those at the «bid» price, i.e. 525 cents. - Sell price for wheat is 525 cents - Quantity of contracts is 5 - Wheat value is 131250 US dollars (5.25*5*5000) - Net profit per the transaction is 2250 US dollars - The return is 28% on the capital invested in just 5 days
Views: 1119 TradeCFDs
What are Indices & How to Trade Them?
Which markets to trade? We talk about Indices now http://www.contracts-for-difference.com/course/trading-indices.html - what are indices? PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE! How to trade Indices? An index is a basket of stocks from a particular country. We have a group of stocks that are weighted depending on the index; some indices have a weighting by market cap so the bigger the market capitalisation of a company the more they will move the index when its stock prices moves. If you have 100 stocks in an index and you have one particular stock in that index that has a 10% weighting this will cause the index to move more. Index examples include USA - Market we have the Dow 30 (made of 30 stocks) - very tight spreads Germany - DAX 30 - this is an absolute beast to trade - at times it can swing wildly. I love the DAX as it can give you those regular runs.. France we have the CAC 40 UK we have the FTSE 100 If you're trading an index, make sure you understand the overall mix making the index; is it mainly financials, mining, retail, telecom - what is the overall mix?
Views: 630 TradeCFDs
Advantages of Trading CFDs
Advantages of Trading CFDs. http://www.contracts-for-difference.com/ You can trade on margin. You can trade long or short and access world markets 24/7. Trading or investing with CFDs is almost exactly the same as trading with shares.
Views: 936 TradeCFDs
Auctions and the Winner's Curse
Winners curse is an economic theory that suggest auction bidders always over pay for their items. The winners curse is the economics of auctions. This video and it's article will give you a strategy for bidding on auctions and also ebay bidding tips and ebay bidding strategy in order to ensure you do not fall victim to the winners curse. The Winner's Curse is an interesting if not alarming theory which says that the winner of an auction is bound to overpay. While there can be exceptions, this applies to most common value auctions which have an element of uncertainty, with incomplete information or some emotional input. The basic idea of the winner's curse is easy to understand. In any given auction, all bidders will have a general idea of the value of an item, but this is unlikely to be the same for every bidder. It can be said that the true value of the item is the average or the median price, and some bidders will undervalue it and others overvalue it. Of course, in a contested auction, the person who places the highest valuation on the item will be the winner. The auction is always won by the person who over values the item. Thus it can be said that if you win an auction, this is bad news for you as you must have paid too much! There are some examples of people winning auctions, say on eBay, where they actually pay less than the true value. If this is the case, however, either it is because the auction has not been well attended, because it is for some esoteric item, or because only one of the bidders really knew the true value of a collectible item, say. It seems inevitable that if the auction has a competitive bid with a degree of subjective assessment of the value, an amount of uncertainty, then the winner may rightly feel disappointed in his purchase. One way which has been suggested to get around the problem of paying too much for an auction item is to use "shaded bids". Bid shading comprises setting a maximum bid less than what you believe to be the true value. If you win with a shaded bid, then by definition you will be happy with your purchase. Another reason for bid shading is that the purpose of the auction, from the buyer's point of view, may be to gain a financial advantage. In other words, the buyer would like to purchase the item on offer at less than its true value in order to improve his overall financial position. This is often the intent of people who frequent auction houses. So even if the buyer succeeds in his bid at the true value of the item, he gains nothing by winning the auction. Whether he possesses the item or the money, it is of the same value to him. The only way that he can improve his position is by purchasing the auction item at less than its true value, whether to keep or for resale. This is a second reason that bid shading would be recommended to anyone who makes a practice of attending auctions. By shading your bid, or ensuring that you only offer up to an amount less than you believe the item is worth, you will not have to suffer disappointment if you win the auction.
Views: 4028 TradeCFDs
Should You Let Your Winners Run Or Take Profits Off The...
Should You Let Your Winners Run Or Take Profits Off The... http://www.contracts-for-difference.com/ If you've enjoyed this video, please click the like button below and share it with your friends and remember to SUBSCRIBE! There's an old trading adage that says you should "cut your losses and let your winners run". Many traders try to stand by this advice, and it has a sound basis. Cutting your losses means that you accept a losing position quickly and make your exit, rather than waiting on in hope that it will turn around and come back to a profit, or at least to breakeven. This makes a lot of sense for short-term traders. The natural inclination is to deny internally that you have got the trade "wrong", which is identified with losing money, so you really want it to turn around and come into profit, and feel inclined to give it time to do so. The trouble is that more often than not the price continues going down, and you end up losing much more than you intended. If you have several trades going this way, you will rapidly find yourself out of capital. Similarly, letting your winners run means that you try to extract the best product possible returns from each trade. This is to avoid the inclination that some traders have to "lock in the profits" as soon as a position becomes a winner. This tendency is particularly strong if you have had a succession of losers, and there is no doubting the gratifying feeling that you have when you close a winning trade and can look at the amount you made. The problem with letting your winners run is if they run out of steam and start coming back. Then you have to deal with the psychological issue that you could have had a certain price, and you didn't take it. This can set up a conflict in your mind, whether to take the lesser profit now on offer or to hope that the price will go back to the level it reached – after all, it got there once. Once again, the psychology of trading is complex and often conflicts with natural feelings and tendencies. Nonetheless, for short-term trader letting your winners run is still good advice, though you must realize that you will never be able to sell at the peak consistently, so you will always leave something on the table. The situation is somewhat different if you are a day trader. In this case, you rely on fast action, doing all your trading in a day and closing the positions each night. It can make sense to take your profits when they are offered, and move on to the next trade. It does not matter so much if you leave half of the theoretically potential gains unrealized, as you might well not even be in the trade long enough for them to come about. In the meantime, by closing the trade early your money can be made available to use again. It may be better to accept the gain and look for the next good opportunity that you can take with the money that you have freed up.
Views: 548 TradeCFDs
Tips for Trading Correlated Markets
Tips for Trading Correlated Markets http://www.contracts-for-difference.com/ If you've found this video useful, please click the like button and share it with your friends and remember to SUBSCRIBE to remain up-to-date! It probably comes as no surprise to you to know that various markets are correlated, that is the prices seem to move in tandem. Many of these markets are obvious, but even so they are worth bearing in mind if you are looking to trade on any of them. It is easy to forget when focused on one security to check on other correlated securities. For instance, you tend to see the price of gold and of silver going up or going down together. In fact, some traders look for a fixed ratio between the two metals, and consider that there may be a correction due in one or the other if it deviates much from a historic multiple. Throughout the 20th century, the ratio was about 1:50, which means that gold costs about 50 times as much as silver. It has not always been at that level, and sometimes the value will fluctuate wildly, but generally the average will only change slowly over time, if at all. The reason for the correlation is easy to understand. If someone is in the market for buying precious metals, perhaps because paper currency is going out-of-favour during a period of high inflation, then they will possibly think first of gold. If demand for gold increases, and the price goes up, then silver looks like a bargain and some of the demand will shift over with the inevitable consequence on silver's price. To some extent, as precious metals, gold and silver can be considered interchangeable to the investor. Another concept associated with correlation is that of one investment tending to lead the price movement for the whole sector. For precious metals, it seems that price of palladium often precedes either gold or silver, so if palladium goes up you can expect both gold and silver prices to follow soon after. You can see the correlation effect in a number of different markets. Looking at financial indices, the DAX and the FTSE index will often move in tandem. In this case, often the DAX is the leader for the European indices. The American stock indices, of which there are several, will usually go up or down together. This includes the Dow Jones Industrial Average, the NASDAQ, the S&P 500, and the Russell. Of course, as some of these have different size companies there can be some discrepancies in movement, but generally the others will follow the Dow, as the most respected and longest standing index. If you are trading commodities, you can again look for similar products that would be substitutes. Wheat, grain, oats, and corn are similar agricultural products, and would tend to move in tandem because each could be to some extent an alternative to another if the price changed. An additional reason for a correlation between these is that, as agricultural products, they would be similarly affected by any climate issues, for instance if there was a bad harvest for one it could very well affect the others, creating an overall shortage which would push all the prices up. Anytime you are trading, you should be on the lookout for correlated products and markets, and make sure that you pick up any early signs of movement in one which may be echoed in the trades you are taking.
Views: 243 TradeCFDs
Cost of Trading CFDs?
What are the costs of trading CFDs. http://www.contracts-for-difference.com/Trading-costs.html PLEASE LIKE AND SHARE THIS VIDEO SO WE CAN DO MORE How it works: Buying. If we think the price of crude oil is going up, we buy or go long at say $36 for the price of oil. The oil price moves up to $48 and we close our position with a sell and we have made $12 x our position size. How it works: Selling. If we think the price of crude oil is going down, we sell or go short at $50. The price moves down to $40 and we close our position with a buy, we have made $10 multiplied by our position size. What is the cost to trade? A CFD broker will offer you two prices. A buy price and a sell price. The difference between these is called the spread. This is your trading cost and is decided by the underlying market (exchange). A commission is then added to your trade price.
Views: 567 TradeCFDs