Archive | June, 2010

What are CFDs?

10 Jun

You have probably heard or read about CFDs in netopia. I mean, it is the buzz now a days. With CFDs getting more and more popular, people are opting to invest on it aside from shares of course.

So, what are CFDs?A CFD is a contract between you and the company that you are using to make the purchase. You trade the same shares as those listed on the stock exchange, but in a simulated market environment. For example, if you were to buy 1000 National Australia Bank Share CFDs, you would have a contract with the CFD provider for that trade. A shareholder, on the other hand, actually owns a stake in the company. In short, a CFD offers the benefits of trading shares by mirroring the performance of the share or index, without the need to actually own them.

The increasing demand for CFDs as another mode of investment has paved the way for continued growth and they are now being offered by many different providers in the market place. There are companies that specialise in CFD trading only to brokers that have added CFDs to their current range of trading instruments. And they all offer their own platforms, strategies, perks and range of CFDs you can trade. Making it harder to choose a good CFD provider and you need to spend time researching all the different choices each provider has to offer.

The good news is there is an exclusive deal accessible through Smart Trading with trading CFDs…know more about this in the next blog.

Do you have a trading plan?

8 Jun

Think about this, if you are on your way for a trip to a foreign place, what is the most important thing that you should not forget to bring?

I would bring cash and my map and I am ready to go.

If you are thinking of investing or trading the stock market, your road map in such a world is a trading plan. You heard it right, you need to have a trading plan.

If you think this is a new term, no this is not. In business, you have your business plan. Like any business, trading is a business so you need a trading plan.

However, do you know what constitutes a good trading plan? Do you want a trading plan template that you can customize along the way of your trading journey? Do you know the steps?

There are a lot of things to consider in making a trading plan. If you are new to trading, you will be needing to educate yourself with the important terminologies that people use in the stock market. Believe me, they use a different language. You will find yourself wondering if you were in Alice in Wonderland rather than the stock market.

You need to acquaint yourself with the tools in trading. With the advent of new technology, software in trading is very much accessible. You need to decide whether you will be needing these trading instruments or not.

You also need to establish what kind of trader or investor you want to be. Would you base your trading decisions by looking at stocks through the company or will you be using charts.

Whew! These are but a few things to consider in making your trading plan or trading plan template.

If you want help, grab a copy of the book Smart Trading Plans by Justine Pollard. It is all there.