Practice account to try CFD trading.

Originally posted by bendigo ↑

It may be of interest that ig markets have a demo account.
(Probably other CFD providers do too)
You can fund up the account with serious paper money and see how you perform.
Although the buy/sell prices are the same as using real money, it is " paper trading "
So psychologically it is not quite the same as doing it with your own real money.
(And any real trader will tell you, having your head in the right place is very important to being successful.)
But it is a useful guide for anyone contemplating trading CFDs

If anyone does try it, I suggest you treat it as if it really is your money.
Be cautious.
Don't be cavalier and reckless. ( but you can top the account up if necessary)
Use money management, position size, discipline etc and pay close attention to the underlying real market

Then at the end of say 3 to 6 months you will know a little more about whether
you MAY succeed with real money.

But none of the above guarantees success.
Indeed, most CFD traders lose money.

Disclosure:
I have traded with ig markets with real money for a number of years, and prior to then with cmc.
But other than being a client, I have no association with them.

I only trade the indices, both long and short, and mainly the Australian ASX200 index.

Occasionally I trade the O/S indices at night.
But this is mainly to keep me amused, as there is rarely anything worthwhile on TV.
The sudden big swings on the o/s indices are very dangerous.
So I am quite cautious, because just like watching most TV,
I don't find losing money very amusing either.

Cheers,

bendigo

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Hi bendigo,

I have traded cfds for 10 years, initially with IG then I gave CMC a go because I found that their platform and charting was better. When they migrated to the new system I traded back with IG and have been with them ever since, (CMCs new system was/is horrible)...I used to trade day and night without much sleep, I still do to some degree but I don't stay up like I used to. I trade indices and commodities mainly with CFDs as I find it more liquid and you get more options available to you. By this I'm talking about guaranteed stop losses where they are available for high liquid markets, so most stocks aren't included...Most stocks also have a high margin rate of around 15-25%, and higher for a larger position...

Trust your charting skills. This is the number 1 most important thing to learn when trading CFDs and try to keep emotions out of it...I do this by figuring out my entry and exit points BEFORE placing a trade based mainly on the charts and to some degree FA...Then after opening a position I place a guaranteed stop loss in a position I see fit from the charts... I found it is better to trade in smaller quantities relative to your balance and leave your stops with a wider room to move, because in volatile times you will be stopped out more often than not and lose money... One important factor to keeping emotions out of trading is that you have to stick to your stop loss, knowing exactly how much you will lose in any given trade, this will not only keep emotions out, but also allow you to get some sleep without monitoring trades every second of the night...Keep your potential losses small relative to your overall balance...

When I say it's important to keep your stop loss in place, I mean do not move it further away as the price gets closer to your out position. However, as the price moves favourable to you, the beauty about guaranteed stop losses is that you can move it in the same direction to your position to lock in profits...If the price moves enough then you can sit your stop loss at the same price you opened the position at, leaving you with a win only scenario, but also keeping a comfortable distance away from the current price, leaving room for volatility... Keeping in mind, this only works for guaranteed stop losses and not normal stop losses, as normal stop losses could still gap if the market moves in a large way quickly...

It is mainly useful to use the demo account with pretend money to get used to how the platform works ie, how to make a trade and get used to the tools available to you, but doesn't really help with the emotion side of things as subconsciously you know whether you are dealing with real money or not...

Good luck with your trading and always be careful when trading CFDs it isn't for eveybody...