Hi

My plan is to open an account with the minimum 2k needed @ deal4free.com and trade in CFDs. Initially I will only concentrate on LONGs, as this seems to be less riskier than the SHORTs. My understanding for a LONG is:

1. You pay interest @ LIBOR + 1.5% on daily basis.
2. There are no commissions
3. 5 to 10% margin
4. Dividends will be credited

Is there anything else I ought to look for? I believe the SHORTs are the opposite.

My intention is not to spend more than 150 per trade. Then I got to work out how long can I have the position open before I call it a day. The intention is to make a quick net profit of 100 within 30 days of opening each position.

I have downloaded the trial software. It freezes everytime I try to run it.

So to summarise, I do not have deep pockets. I can not afford to get Level 2 at present as I have to look after each penny. I am only interested in UK stocks at present.

Any thoughts?

Thanks in advance, Manoj

be careful they move very qickly and if you are not watching them you may end up being asked for a call and if tou have not got any spare cash you may have too sell losing you 10% plus what ever you are down i think that what happends

Initially I will only concentrate on LONGs, as this seems to be less riskier than the SHORTs

That would depend upon whether the market is trending
up or down.

If you only go long in a falling market then I confidently
predict that you will lose your 2000.

Suggest you look for stock longs in a rising market and
index shorts in a falling market.

Do not use all your margin in the beginning, keep your positions
small as you gain experience and keep position sizing to a level
where you will not get a margin call unless there is a catastophic
decline.

90% of beginners lose their whole pot within 6 months because
of poor money management.

Melnibone

Happy New Year to all, Thanks for all your advise.

I finally managed to get the demo software running on a new computer. I will be getting broadbank @ 150 kbps next week. Currently on 46.6 kbps dial-up.

Ran the demo software and found it slow and crude in facilities, but I am convinced it is the cheapest solution for small CFD trades. Any comments are welcome. I would be trading (margin) between 50 to 150 and will have a close out strategy for each sale.

I have been dealing in shares for about three years, and last two have been in trying to recoup the losses (MONI, EGS, RTK). I managed to trade BBY three times over three months, each time netting a small profit. So the plan is to bring that strategy across to CFDs, and increase the net profits through margin trading.

Time will tell. Cheers Manoj

If you don't want to lose your 2k then down load 'John Pipers's The Way To Trade. If not don't risk any more than 2% on any one trade. 2k capital then 40 max loss! Get rich slowley, not get poor FAST!

Good Trading.

Mike.....

Mike

Thanks for the valuable advice. I will certainly take that into consideration. Is the recommended reading free to download, if so, do you mind giving me the reference. My e-mail is manoj@ranaweera.fsbusiness.co.uk

Many thanks, Manoj

ranaweeram.
e-mailed you but dont think you received it! you sure that was the correct address U gave me? anyway here's the site you requested > http://www.the-way-to-trade.com - the download/book's not free but well worth the investment (maybe the best trade you will ever make);!
The year had started well, more days like this and we'll all be wheeling the dosh to the bank.

Cheers Mike.....

Thanks Mike. The e-mail address is correct.

Ranaweeram - have u taken the plunge on the cfds yet?
rgds
zarif

Zarif. I opened the account today, and waiting for the CD-ROM to come through the post. If you are a well experienced CFD trader, I would welcome any advise you may have on stop losses. Should this be fixed at 5, 10 or 15%? Cheers, Manoj

Ranaweeram

Couldn't miss this post as I was in a similar situation a year or more ago. There are loads of caveats in this but the most important thing you need to know is "Stay in the game".

This might sound as though I'm trying to be clever but I've heard it from so many people and know it's true from my own experience.

Rule No 1: Trade really small to start with. You won't win much, but you won't lose too much either - and believe me everyone does lose at first. Consider it your education.

2. Gradually increase your position size when you start winning.

3. A small position will allow a wide stop loss which for swing trading over several days is neccessary.

If I may add to Seymours' wise words:
Look at the price you enter the trade and then look at your stop (wherever it is) and ask yourself if you can afford to lose that amount. If you can't, move the stop or wait for a better trade. Don't assume you will win. Being flat (not trading) is also a valid position.
Good luck.

A mistake I made early on - always make sure you leave at least 25% of the fund in free equity, that way you should always have the cash so you decided when to close a position, and not be forced to. Also they will not ask you to top up the cash.

Also don't trade more than 5 shares - less if you can do it. Less to track, and less likely to miss a potential problem!

Ref stop losses.

Work out your stop loss before you enter a position
and stick with it.

Rather than look at a % stop loss, work out the support level
for the stock you are buying and place your loss below this
price.

I assume you will be looking to buy near support levels and
sell near resistance levels?

Melnibone.

Thanks everyone for excellent advise. CD-ROM has not arrived yet, so have to stay till tomorrow to start the game. Initially, I am planning to stick with stocks I know, i.e. BBY (favourite, traded three times in last five months, fluctuates between 200 and 220), TLW, BARC and LLOY. Will use this thread upto date with my progress and hopefully less failures, Cheers, Manoj

Ranaweeram: I am a s/b player but would love to see haw u are getting on as the next step for me is cfds aswell.

rgds
zarif