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Brisbane, Queensland, Australia
Market Wizard
Experience: Advanced
Platform: JIGSAW/SIERRA CHART
Broker: MacQuarie Futures/AMP Clearing/CQG
Trading: HHI, HSI, FDAX
Posts: 502 since Feb 2012
Thanks Given: 448
Thanks Received: 535
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CFDs are never a good idea as an intrday trading option. They're completely designed to generate brokerage via the spread, period.
Do Professional trades use CFDs? Perhaps if short positions are not permitted on some markets, like the ASX. Even in those cases, you must make sure that the CFDs are tracking the underlying...They need to offer Direct Market Access (DMA).
They make their money on the spread. That means when you enter a trade, you are already behind by whatever their difference between the bid and ask were/are.
They attract unsuspecting individuals by offering a small opening account, which they proceed to chew up on spread.
CFD's can be used to trade EOD equities for swing trades, where the spread is not so critical.
Be careful, do your research first and listen to the people with the experience, save yourself some pain and funds lost.
Oh, remember in the case of Index CFDs, like the one you mention, they track the cash equity market, and not the futures contract.
XS
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