monte cristo
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My system called a total of 6 trades on fx last year. If I were trading equities it would have been 44 and I would have been extremely profitable.
CFD's for US resident
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damianoakley
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So would that have involved holding 44 positions in 44 different equities at the same time?
Thanks
Damian
Thanks
Damian
monte cristo
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Not at the same time but in total through out the year. I should have a hedge fund by now its depressing lol!
damianoakley
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Hi monte,
Surely if you are only intending to trade 44 stock positions over the course of a year. you don't need CFD's to do this.
You could achieve decent profits trading real shares in the actual market. Other than increasing your risk, I fail to see what major advantage trading CFD's over shares would be giving you.
Yes, you will get some extra leverage, but with all the time and effort you have spent in trying to find a way to trade CFD's from the U.S., you could have been making some steady profits in the actual market.
This of course is just my observation, so please don't go flying off the handle !
Thanks
Damian
Surely if you are only intending to trade 44 stock positions over the course of a year. you don't need CFD's to do this.
You could achieve decent profits trading real shares in the actual market. Other than increasing your risk, I fail to see what major advantage trading CFD's over shares would be giving you.
Yes, you will get some extra leverage, but with all the time and effort you have spent in trying to find a way to trade CFD's from the U.S., you could have been making some steady profits in the actual market.
This of course is just my observation, so please don't go flying off the handle !
Thanks
Damian
monte cristo
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$1,000 vs $15,000 a pop come on guys.
monte cristo
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Because they want to keep old money old. Now before I go further can I really trade any stock over a certain market cap? IG says anything over 500 million is ok is this the case?
As I understand it the main reason for the 2-1 (50%) limit on stocks leverage in the US is because of the 1929 crash, which was apparently made hugely worse because everyone was on "shoestring" margins. It came in with the 1933(?) Federal Reserve Act, which is still today the basis of most US securities laws and regulations.
FWIW I don't actually think things are that much different here in the UK. The only broker I am aware of who offer non-OTC margin on stocks is IB, and their margin starts at about 35% for FTSE100 stocks. It is only the fact that we have a very liberalised OTC regime that allows the 5-10% margin prevalent in the CFD/spread-betting areas.
As to the practical problem, I have no idea, but perhaps there is a way to become an "institutional investor" somehow? US funds are active in the London CFD market, so it must be possible ...
FWIW I don't actually think things are that much different here in the UK. The only broker I am aware of who offer non-OTC margin on stocks is IB, and their margin starts at about 35% for FTSE100 stocks. It is only the fact that we have a very liberalised OTC regime that allows the 5-10% margin prevalent in the CFD/spread-betting areas.
As to the practical problem, I have no idea, but perhaps there is a way to become an "institutional investor" somehow? US funds are active in the London CFD market, so it must be possible ...
As to market cap:
From reading their website it seems that IG will in general offer a CFD on all stocks with market cap greater than £10m (c.$20m). However, since they claim to mostly hedge their positions (indeed have to with the synthetic Direct Access platform) it becomes a matter of individual stock liquidity as to whether they will offer it or not. Or, with short positions, it's a question of how easy it is to borrow the stock in question.
Basically, outside the primary indices, ask ...
From reading their website it seems that IG will in general offer a CFD on all stocks with market cap greater than £10m (c.$20m). However, since they claim to mostly hedge their positions (indeed have to with the synthetic Direct Access platform) it becomes a matter of individual stock liquidity as to whether they will offer it or not. Or, with short positions, it's a question of how easy it is to borrow the stock in question.
Basically, outside the primary indices, ask ...
NotQuiteRandom
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No, US residents can not trade CDFs. Your government is still wrapping you in cotton wool (while killing everyone else!)
in2uxs
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I agree with Damien
CFD's do offer the ease of shorting markets and that's about it. CMC did offer another advantage of no commission but as from the 7th of May they're charging £8 a go so all in all the differences between CFD's and convention share trading are becoming less and less obvious.
If you add in the wide spread, over night charges then this again devalues the reasons why you should trade CFDS. Another worry is the "liquidation" fact. Should stocks move against you even for a day or so you either have to risk more and more to keep your positions alive or else you get a nice phone call from your broker saying "sorry old chap you've been liquidated!" that's not a nice feeling believe me.
If you buy the conventional share however you don't have any such problems, and worse comes to the worse you still draw your dividend which is all yours and is not eaten away by over night charges.
Personally, I've always made money trading the conventional share but never made any trading CFD's - I've analysed this many times and have come to the conclusion that CFD trading makes it too easy to act irrationally rather than rationally - the lure of betting money you don't really have in the chance of making a quid grand is very alluring even for the most rational of people. I have done this many times.
If I were you I'd stick to convention shares. In a way I'm glad CMC have started to charge commission as its a good reason now to give up CFD trading once and for all.
CFD's do offer the ease of shorting markets and that's about it. CMC did offer another advantage of no commission but as from the 7th of May they're charging £8 a go so all in all the differences between CFD's and convention share trading are becoming less and less obvious.
If you add in the wide spread, over night charges then this again devalues the reasons why you should trade CFDS. Another worry is the "liquidation" fact. Should stocks move against you even for a day or so you either have to risk more and more to keep your positions alive or else you get a nice phone call from your broker saying "sorry old chap you've been liquidated!" that's not a nice feeling believe me.
If you buy the conventional share however you don't have any such problems, and worse comes to the worse you still draw your dividend which is all yours and is not eaten away by over night charges.
Personally, I've always made money trading the conventional share but never made any trading CFD's - I've analysed this many times and have come to the conclusion that CFD trading makes it too easy to act irrationally rather than rationally - the lure of betting money you don't really have in the chance of making a quid grand is very alluring even for the most rational of people. I have done this many times.
If I were you I'd stick to convention shares. In a way I'm glad CMC have started to charge commission as its a good reason now to give up CFD trading once and for all.
NotQuiteRandom
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You make valid points but I gind that the leverage offered with CFDs is the clincher for me. If I can get 20:1 on a CFD versus no leverage (or maybe 50%) on the underlying stocks then I would rather tie up less capital and use a CFD.
As you say however, it requires discipline. I am currently looking a bit silly with an over leveraged long Neteller position and they have suspended trading. One of my speculative 'punts' gone bad!
NQR
As you say however, it requires discipline. I am currently looking a bit silly with an over leveraged long Neteller position and they have suspended trading. One of my speculative 'punts' gone bad!
NQR
in2uxs
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Discipline is definitely the key. Using various trading systems i've double even trebled my bank within just a few months, but then I get the gambling bug and do daft things, and lose what i've made within days.
I guess making money is not so much how much you make but how much you can hold on to.
To have the discipline needed to trade and make money is something that you must have otherwise you'll be treading water at best. Whether this "discipline" can be learnt or not is hard to answer - personally I've sabotaged my own efforts more times than I care to remember.
I guess making money is not so much how much you make but how much you can hold on to.
To have the discipline needed to trade and make money is something that you must have otherwise you'll be treading water at best. Whether this "discipline" can be learnt or not is hard to answer - personally I've sabotaged my own efforts more times than I care to remember.
NotQuiteRandom
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Ahmen!
in2uxs
Why should trading discipline be any different from that required to drive a car? Do you ever feel the urge to take a gamble by running a red light? I doubt it. When you get the urge to gamble why not go online and play poker for pennies, or find a one-armed bandit and blow 50 quid, but leave the stack you're made from trading alone. Then, when the urge is out of your system, you can go back to trading with the warm glow that comes from scratching the itch to gamble without the empty feeling inside that comes from undoing all the trading good that you're achieved. Here endeth the sermon.
RIWF
Why should trading discipline be any different from that required to drive a car? Do you ever feel the urge to take a gamble by running a red light? I doubt it. When you get the urge to gamble why not go online and play poker for pennies, or find a one-armed bandit and blow 50 quid, but leave the stack you're made from trading alone. Then, when the urge is out of your system, you can go back to trading with the warm glow that comes from scratching the itch to gamble without the empty feeling inside that comes from undoing all the trading good that you're achieved. Here endeth the sermon.
RIWF
riwf
You could say..
Stop going overdrawn and you wont get charged at the bank
Stop smoking and reduce your risk of cancer
Need some knowledge, read the right books
Want to save money? spend less than you earn,
Hate your boss?.. Leave your job..
Want to lose weight? cut out fatty foods and food s high in sugar..
Want to come off drugs.. stop taking them and manage your emotions..
If only such things were that simple........
Paul
You could say..
Stop going overdrawn and you wont get charged at the bank
Stop smoking and reduce your risk of cancer
Need some knowledge, read the right books
Want to save money? spend less than you earn,
Hate your boss?.. Leave your job..
Want to lose weight? cut out fatty foods and food s high in sugar..
Want to come off drugs.. stop taking them and manage your emotions..
If only such things were that simple........
Paul
in2uxs
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RIWF
I don't think its the desire to gamble as such, its more a inner drive to undo all your good trading work.
I read a book regarding self sabotage not too long ago and it does seem to be a key reason why many people fail to achieve things. To mask the problem by betting pennies is not really the solution. This is a little like wiring up the jaw bone of an over eater - works for a time but sooner or later they'll fail again.
I think the solution for every self sabotager is that in order to achieve success they must change their whole character. No longer to see themselves as builders, warehouse men, plumbers, etc etc but as successful traders who makes money. To get to that position takes time and effort - and more often than not most will fail and end up stacking shelves again as this is how they see themselves. From a personal point of view I can at times actually feel my character changing - a good example is whenever I have that urge to "take a risk for a quick profit" should I step back and say, "no thank you" then I do feel as if a old negative chunk of me has been striped away. It's just a matter of continuing until I no longer see myself as a part time trader who does it as a bit of a hobby but as a serious investor.
I don't think its the desire to gamble as such, its more a inner drive to undo all your good trading work.
I read a book regarding self sabotage not too long ago and it does seem to be a key reason why many people fail to achieve things. To mask the problem by betting pennies is not really the solution. This is a little like wiring up the jaw bone of an over eater - works for a time but sooner or later they'll fail again.
I think the solution for every self sabotager is that in order to achieve success they must change their whole character. No longer to see themselves as builders, warehouse men, plumbers, etc etc but as successful traders who makes money. To get to that position takes time and effort - and more often than not most will fail and end up stacking shelves again as this is how they see themselves. From a personal point of view I can at times actually feel my character changing - a good example is whenever I have that urge to "take a risk for a quick profit" should I step back and say, "no thank you" then I do feel as if a old negative chunk of me has been striped away. It's just a matter of continuing until I no longer see myself as a part time trader who does it as a bit of a hobby but as a serious investor.