CFD Trading Strategies

Tuesday 18 March 2014

CFD Trading Strategies to Boost Your Trading

CFDs or Contracts for Difference are trading instruments which allows traders to invest as per the movements of prices in the market in the long term. The holder can sell or buy an asset at a future date at a current price. These are traded by the CFD brokers. Traders can definitely take advantage of leveraged positions. Although trading CFDs may sound easy but getting the desired results is not that simple. The biggest problem in enjoying a successful investment is the absence of product as well as investment knowledge.

Just like any other type of investment, CFD trading also involves risks. Therefore CFD trading strategies can act as a guide in your trading. In order to have a successful and sustainable investment it is important to know how to formulate your CFD trading strategy. It becomes difficult to earn desired profits in the absence of proper strategies.

Going long is the most widely used strategy. It involves searching for markets, indices and securities that provides potential long profits. CFD is one of the trading instrument which traders can use to bide their time as well as money whenever the market is in their favor.

Going short strategy involves selling contract as the fundamental act and purchasing them whenever prices fall. This trading strategy is used when the market trends are expected to go down in the long term. It requires trader to find out the factors that may considerably impact the performance of the instrument and maintain a small position reaping the benefits of the expected downfall

Pairs trading is another CFD trading strategy that is very popular among the big investors. It involves finding and investing on related shares and instruments which can fluctuate in tandem.

CFD trading depends on individuals and situation and therefore suggesting a standard strategy is very difficult. Selecting appropriate CFD trading strategies involves considering various factors such as trading objectives, available capital and risk tolerance level of the trader.

About Trading Lounge

Trading Lounge is an online trading, analysis and education service that offers services such as Day Trading, Trading Strategies, Technical Analysis, and How to Trade advice by a reputable and experienced trading coach. TradingLounge.com.au was started by Peter Mathers in 1982 to meet the growing demand of accessible and sensible education in online trading.

Tuesday 25 February 2014

CFDs (Contracts for Difference) – Providing solution to traders

CFDs or Contracts for difference emerged out of the exceptional tax regulatory environment in the UK. They were created as an alternative to prevent unnecessary taxes for companies that wished for protection against the risk in their portfolios. As soon as CFDs were developed companies jumped into the retail sector. It has become a widely accepted concept across the globe now and offers a simple solution for traders to trade in currencies, shares and commodities across the world.

CFDs help in creation of a contract between 2 private parties. The seller and buyer can just agree to pay each other the difference between the present cost of the asset and its price at the time of contract. Through this simple contract any investor can bid on the stock share prices, index values or commodity prices without the need of actually buying the item.

CFDs have three major advantages to end users – Firstly, they can go long or short with few if there are any restrictions, secondly, unlike futures and options, they can buy a contract that will never expire and lastly, they can select the amount of leverage that they want to enjoy putting up anywhere from 1%-30% of the value of contract based on the agreed-upon contract or counter party. This without any doubt is the fastest developing financial sector.

CFDs does not hold greeks like beta, delta, etc. and therefore are superior to options. There is no complex formula to calculate the actual value of the CFD or the impact of unstability on the CFD. Besides, CFDs are also superior to SSFs in terms of both flexibility and liquidity. You need to purchase a set number of shares in SSFs, generally 100 at a fixed rate of 20% of the contract value and at an inflated rate to the basic share because of different interest rate costs but with a lack of capability to share the dividend payout of the stock.

However, there are some problems with CFDs . As they are traded with very little or no regulatory oversight, the speculated liquidity for your position can go off overnight. Moreover, they are nonnegotiable contracts.

About Trading Lounge

Trading Lounge is an online trading, analysis and education service that offers services such as Day Trading, Trading Strategies, Technical Analysis, and How to Trade advice by a reputable and experienced trading coach. Tradinglounge.com.au was started by Peter Mathers in 1982 to meet the growing demand of accessible and sensible education in online trading.

Benefits of CFD trading report provided by Trading Lounge

CFDs or contracts for difference are one of the most preferred financial services. They are flexible, powerful and easily accessible instruments which help you to get exposed to different markets such as Australian shares CFDs, Stock market indices, International share CFDs, Commodities, Foreign exchange, etc.

Investors and traders with different levels of experience and backgrounds are now trading CFDs to maximize their returns and manage their risks in a better way. Trading Lounge offers a number of trading reports – CFD trading report, Forex trading report, Share trading report and investment trading report for beginners and experienced traders. These reports provide an insight to our methods and strategies that will improve the chances of earning profits from the markets.

The guidance, education and suggestions given in our CFD trading report aim at helping our members make the most out of their trading by offering high quality research and analysis.Trading Lounge's CFD report is one of the most comprehensive CFD trading, news, research and education service in the trading sector.Trading CFD is a challenging pursuit which requires traders to be aware of different information streams at a single time in order to receive the best results.

Trading Lounge offers a wide range of trading reports which includes:

Day ahead Report – The daily report Monday to Friday 7.30 AM Australian Eastern Daylight Time (AEDT), (UTC/GMT +11). The day ahead report is a daily technical analysis report which is published before the trading day in Australia, UK and the US. It gives a thorough analysis of the overnight markets US, UK and Europe.

The CFD trading report provided by Trading Lounge comprises of certain trading ideas for securities from across the world, helping traders who uses these reports to expand their activity and take part in important opportunities at any one time.Apart from our suggestions and analysis, the report also contains plenty of CFD related education and research. Our objective is to make our education and trading as simple and easy to understand as possible.

About Trading Lounge