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Cfds

USDCAD : Why trade currency as a CFD?CFDs are financial contracts between a broker and trader that pays for the difference in the settlement price between when you open and close a trade. If a trader expects the currency to move higher, they will enter a long position with a specific lot size. Conversely, if the trader expects the currency to move lower, they will enter a short position, expecting to profit from it. The benefit of CFDs is that there is no need to own the physical asset. Instead, traders speculate in the difference between opening and closing trade prices. While these contracts can be used to speculate on the foreign exchange markets, the same concept applies to other assets such as commodities, oil and indices. In Forex trading, CFDs allow us to buy or sell the currencies without actually owning the physical asset. For example, let’s say you live in Canada and, through your analysis, you expect CAD to depreciate and USD to appreciate. What could you do to hedge against the CAD dollar that you have on hand? Well, you can buy or “go long’ on USD/CAD and profit from the movement in prices. By buying or entering a long position on USD/CAD, you are essentially buying the USD and selling CAD. SO, WHAT IF YOU DECIDED TO TRADE WITHOUT THE USE OF CFDS? This would mean going down to your local currency dealer and exchanging your physical Canadian dollars for US dollars, leaving you holding on to stacks of US dollars. When the value of the US dollar moves higher, you would once again head back to the currency dealer to exchange them into CAD. Now that the USD is stronger, you can exchange them for more CAD dollars than the initial amount you invested, thereby realising a profit. SOUNDS LIKE A HASSLE? It is. That’s why CFDs are so popular for forex trading: it removes the need to hold those stacks of physical cash, making trading much more convenient.
Education
by CeoCodes
12
AMAZON AMZN Better understanding of how CFDs workCFDs are financial contracts between a broker and trader that pays for the difference in the settlement price between when you open and close a trade. If a trader expects the currency to move higher, they will enter a long position with a specific lot size. Conversely, if the trader expects the currency to move lower, they will enter a short position, expecting to profit from it. The benefit of CFDs is that there is no need to own the physical asset. Instead, traders speculate in the difference between opening and closing trade prices. While these contracts can be used to speculate on the foreign exchange markets, the same concept applies to other assets such as commodities , oil and indices. To gain a better understanding of how CFDs work, let’s look at Amazon stock as an example. If you think Amazon shares are going to go higher, you would want to buy into this stock and profit from this opportunity. Hence, you purchase 10 CFDs on Amazon shares at $2,500, so the total value of the trade will be $25,000 (10 x $2,500). If Amazon appreciates to $3,000, you will make $500 per share, which is a $5,000 profit (10 x $500). CFD concepts are applied to forex trading as well.
NASDAQ:AMZN
by CeoCodes
10
GOLD (XAUUSD) Looks Very Bearish! Here is Why after a sharp bullish movement on gold yesterday on the hourly chart, the price stabilized and was quite weak during the US session. analyzing the price action we see a sequence of lower highs and bullish reactions from 1885 setting equal lows. it is a classic descending triangle formation and it is a bearish biased pattern. in case if bears manage to close below its horizontal support on hourly, the price will drop. first goal will be 1872.5 if we set a new higher high higher close on hourly, setup will be invalid.
FX:XAUUSDShort
by VasilyTrader
20
Update on Oil ShortsExpect the ending diagonal (whose strength I had previously underestimated) to continue until ($42.20-$42.50). This should then complete the uptrend in wave 3v or a wave-5. Currently holding 0.8 contract short averaging $37.52. Amend (10k) entry short limits from < $41.40-> $41.80 > zone to the < $42.30, $42.40, $43.50, $43.60, $43.70 > each entry at 10k to a total of 50k in all. Position average becomes $39.43 to a size = 1.3 contracts with average risk @ $42 = -3340 ~ -33% on a $10,000 account IF SHORT ENTRIES FILL, place TP for <$42.30->$42.70> at $41.05 Also place TP for 0.2 contract size ($37.52) at $41.05 position size then diminishes to 0.6 contract averaging $37.52 at a total risk -$3000 = -30% at price level $42.50 DON'T PLACE SLs Tp for 0.6 contract remains at $34 as per target on chart above. DO NOT get greedy & hold to the added shorts at <$42.30-$42.70> to target $34. If/when momentum confirms reversal to the diagonal formation, we could re-add shorts on the way down. Note that as things stand we have almost doubled the risk level on the account from -15% to -30%, even though the contract size has diminished by almost 50% Take Care & Stay Safe
TVC:USOILShort
by Summerset
Update on Oil ShortsExpect the correction to be concluding in an ending diagonal formation as shown on chart. There is still a mild chance to see <$39.3/66> in a spike of leg-e, though I don't think it will materialize. Hold shots averaging $37.52 <36.70-38.40> for a 1.2 standard contract size to target $32.50 Add 30k short entries @ $39.30/40/50 (if / when seen). If short entries at $39.30/40/50 are filled, take out 30k off position @ $37.80 to reduce risk. Good Luck. take Care & Stay Safe
TVC:USOILShort
by Summerset
7
Update on Short Entries & Implementation of Risk AssimilationAll short limits should have filled to a short holding of 1.2 standard contract - averaging $37.325 Position dynamics explained on chart. I will be implementing the Risk Assimilation matrix outlined on the chart (Black box). This is a money management technique used to securing a position without the use of stop losses. Currently place limit sells at 10k @ $38.20 10k @ $38.30 10k @ $38.40 Place limit TPs @ $37.00 for 30k of short holdings, ONLY If ABOVE LIMIT SHORT ENTRIES ARE FILLED. I will strictly adhere to the following Risk Management requisite:- Over all position Risk on a $10,000 account will be held between (-12%to -15%). reward from ($37.5 entry --> $32.5 target) around +50% on a 10,000 account. Take Care & Stay Safe
TVC:USOILShort
by Summerset
4