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CFD/Depth and sales platform, help wanted.


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CFD/Depth and sales platform, help wanted.

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  #1 (permalink)
Brisbane, Australia
 
 
Posts: 95 since Mar 2018
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Hello I'm attempting to learn the order flow scalping method of trading which requires a platform that has a good DOM displaying the market depth and sales/order flow, I also have little capital and wish to trade CFD's to start out, does anyone know of a trading platform (and CFD broker) that displays the market depth and sales?

I have been recommended: Sierra chart, CQG Qtrader, within the demo of Sierra chart there is a list entitled "CFD" but I'm not sure on the brokers that offer them through the software and how exactly to get it all set up, I am starting to get headaches so I thought that perhaps some people on here could help?


Thank you.

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  #3 (permalink)
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Experience: Intermediate
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CFDs are usualy traded with broker which is market maker and therefore is no market depth

You can use official exchange futures data and trade CFD equivalent based on futures data with market depth

Sierra offer CME globex data for

$33 sierra fee
$25 data providing fee
$42 CME Globex data

https://www.sierrachart.com/index.php?page=doc/SierraChartRealTimeFuturesStockDataFeed.php

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  #4 (permalink)
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skepsi View Post
CFDs are usualy traded with broker which is market maker and therefore is no market depth

You can use official exchange futures data and trade CFD equivalent based on futures data with market depth

Sierra offer CME globex data for

$33 sierra fee
$25 data providing fee
$42 CME Globex data

Hmm that is an excellent idea but I'm not sure if the dynamics of it would work very well for scalping, what about placing limit orders and moving stops fast etc? I suppose if all I needed to do was market orders it would work quite well, any experienced order flow scalpers here? are you using market orders very much or?

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  #5 (permalink)
Market Wizard
Tallinn, Estonia
 
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CFD spread it too wide for scalping.
Example if we take West Texas Oil spread is 7, if we compare it to futures CL then disadvantage is 70 $ for CFD.

Oanda spreads https://www.oanda.com/forex-trading/

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  #6 (permalink)
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lemons View Post
CFD spread it too wide for scalping.
Example if we take West Texas Oil spread is 7, if we compare it to futures CL then disadvantage is 70 $ for CFD.

The spread is too wide? as in say spread at 0.20c per contract, I buy 1000 contracts and the market price moves up a maximum of 20c bringing me to breakeven paying off only the spread of my purchased contracts? or do you mean something else?

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  #7 (permalink)
Market Wizard
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Revan View Post
The spread is too wide? as in say spread at 0.20c per contract, I buy 1000 contracts and the market price moves up a maximum of 20c bringing me to breakeven paying off only the spread of my purchased contracts? or do you mean something else?

You are learning and have little capital and you want to buy 1000 contracts.
Go for it

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  #8 (permalink)
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lemons View Post
You are learning and have little capital and you want to but 1000 contracts.
Go for it

It is an example.


My query stands, if anyone would care to explain, thank you.

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  #9 (permalink)
Market Wizard
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Revan View Post
It is an example.


My query stands, if anyone would care to explain, thank you.

20 c to breakeven in futures market CL contract you will be ca. 195 € in profit ( depending in commition size ).

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  #10 (permalink)
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With futures markets you pay commission on every trade however you enter. With a futures platform if scalping you can try to buy the bid instead of hitting the offer with a market order. For crude oil the spread is usually 1 tick, which is $10 on one contract and an easily available commission of $5 or less per contract. Therefore one could get in on a trade paying only half a tick in commission and also entering on the favourable side of the spread for a good proportion of trades with limit exit orders working in the market.

From Lemons' Oanda example he gives the West Texas Oil spread as 7 ticks. There is a thread in Elite Trading Journals called the Scalper's Journey where people talked about taking 5x5 trades, ie banging out 5 tick scalps on five lots ($250). They were taking profit at five ticks whereas with a seven tick spread you wouldn't even be at break even on the trade.

Scalping is very difficult for most people to do consistently well and beat their costs or not have lots of small winning days punctuated by occasional much larger losing days which makes their overall expectancy negative. Trying to scalp on a platform where the broker earns their money from the spread would make it much harder still.

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  #11 (permalink)
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I wouldn't bother.

The liquidity on CFDs is really low - but more importantly - these CFDs are artificial products rather than true derivatives that move purely based on order flow.

Like Forex - Prices can be set by the issuer of the product to prevent arb trades.

So trade the CFDs - but use order flow from the futures markets. You'll make much better decisions.

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  #12 (permalink)
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DionysusToast View Post
I wouldn't bother.

The liquidity on CFDs is really low - but more importantly - these CFDs are artificial products rather than true derivatives that move purely based on order flow.

Like Forex - Prices can be set by the issuer of the product to prevent arb trades.

So trade the CFDs - but use order flow from the futures markets. You'll make much better decisions.

The title of this thread is "CFD/Depth and sales platform, help wanted" but am I correct to assume that these two items can never be found together and that this is for a reason?

Also are you suggesting to scalp via market data from one platform (i.e. Sierra DOM) and then place the CFD orders on another live platform? would this work?

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  #13 (permalink)
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Revan View Post
The title of this thread is "CFD/Depth and sales platform, help wanted" but am I correct to assume that these two items can never be found together and that this is for a reason?

Also are you suggesting to scalp via market data from one platform (i.e. Sierra DOM) and then place the CFD orders on another live platform? would this work?

Yes. Because there is no depth of market (dom/order book) on a CFD platform, the market is made by the 'broker'.

I've actually done ok using live market data, and placing orders with a cfd broker, but that was with 5 to 10pts of risk, rather than a few ticks you might be looking for when scalping. The prices and movements wouldn't be the same between the two platforms for all the aforementioned reasons.

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Revan View Post
The title of this thread is "CFD/Depth and sales platform, help wanted" but am I correct to assume that these two items can never be found together and that this is for a reason?

Also are you suggesting to scalp via market data from one platform (i.e. Sierra DOM) and then place the CFD orders on another live platform? would this work?

Yes - I would absolutely recommend that - but not Sierra DOM of course ;-)

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Due to the nature of CFD they are not allowed to be discussed on the site. They are in the same category as penny stocks.

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  #16 (permalink)
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tturner86 View Post
Due to the nature of CFD they are not allowed to be discussed on the site. They are in the same category as penny stocks.

Hmm, to be confirmed by @Big Mike but I don't think so.
I'll put CFD in the same category as ETF, which are not as "scam-compatible" as penny stocks or binary options for example.

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sam028 View Post
not as "scam-compatible" as penny stocks or binary options for example.

Not from today .ESMA introduces restrictions to CFDs and ban binary options

https://financefeeds.com/esma-bans-offering-binary-options-retail-investors-introduces-restrictions-cfds/

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  #18 (permalink)
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tturner86 View Post
Due to the nature of CFD they are not allowed to be discussed on the site. They are in the same category as penny stocks.

Hello tturner86, hmm it says nothing in the disclosure, I'd imagine it's a soft shadow policy which is a given on a privately owned forum and in the case of moderation has that human element to filter the bad from the good which is way more progressive/useful than an absolute ruling, I trust the mods around here can see that this particular thread has useful info, also hello everyone I am new, hey BigMike.


Guys, getting back onto contract for difference order flow scalping.

After some research it seems that yes as previously stated, market makers do not provide depth for CFDs, you can however view market depth with direct market access (DMA) CFD's, but whether this is suitable enough I'm still not sure, does anyone have Sierra chart? if you look in the symbols it says "CFD" in there.. I'm pretty sure I can get the DMA accsess CFD's up in the Sierra DOM. does anyone have any comments? like I said I'm new.

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sam028 View Post
Hmm, to be confirmed by @Big Mike but I don't think so.
I'll put CFD in the same category as ETF, which are not as "scam-compatible" as penny stocks or binary options for example.

I am not for sure, there was a thread at one time discussing them and I thought @Big Mike said it wasnt allowed.

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sam028 View Post
Hmm, to be confirmed by @Big Mike but I don't think so.
I'll put CFD in the same category as ETF, which are not as "scam-compatible" as penny stocks or binary options for example.

I respect the fact that you are trying to save many traders from making bad choices and yes, penny stocks and Binary options are instruments where many customers are taken advantage of and cheated out of hard earned money.
However, we can not go around in determining what is legit just based on the underlying product. The broker/market maker/dealing-desk makes a big difference in determining whether the product is priced right and whether the traders have a truly fair chance for positive expectancy.

On this note....

An ETF is an exchange-traded product while CFDs are made by a dealing-desk/Market-Maker and could vary in pricing across different broker on the exact same instrument. CFDs are based only on the cash value of the product.

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  #21 (permalink)
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mattz View Post
I respect the fact that you are trying to save many traders from making bad choices and yes, penny stocks and Binary options are instruments where many customers are taken advantage of and cheated out of hard earned money.
However, we can not go around in determining what is legit just based on the underlying product. The broker/market maker/dealing-desk makes a big difference in determining whether the product is priced right and whether the traders have a truly fair chance for positive expectancy.

On this note....

An ETF is an exchange-traded product while CFDs are made by a dealing-desk/Market-Maker and could vary in pricing across different broker on the exact same instrument. CFDs are based only on the cash value of the product.

Matt Z
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Hey Matt, what about direct market access CFDs?

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  #22 (permalink)
 
 
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Hey Matt, what about direct market access CFDs?

To the best of my understanding, a true DMA CFD could only be valid if there is an underlying instrument trading on the exchange that the dealer can hedge against. I am not sure you can truly say that about every CFD offered there.

Matt Z
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Trading futures and options involves substantial risk of loss and is not suitable for all investors. Past performance is not necessarily indicative of future results. You may lose more than your initial investment. All posts are opinions and do not claim to be facts. Please conduct your own due diligence. Use only Risk capital when trading Futures.
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  #23 (permalink)
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Hi, I am trading CFD now with Oanda.
To my understading, a CFD is a trading tool that follows the underline assets, which is of small face value the the under funded can trade the market.
To trade a CFD, you have to read the real market chart it's tracking.
Like in Forex, the broker charges in spread. A decent broker's CFD will move in the same way with it's tracking vehicle.

I have observed many brokers, here's my result:

Oanda is an honest one, their CFDs move in line with the underline assets, the price of their CFD is discounted frome the future contract, so the price is few points lower, but the movement is the same. The Spread of ES (US SPX500) is just 0.5, German(Dax) 30 is 2(Day session), which I think is quite decent.

CMC markets. A good broker, their CFD move the same way with real markets. Spread is higher than Oanda.

IG. IG offers many CFD, usually the index future and the index itself. I observed the cfd of index, the price of CFD does not move in the same way with the index( it's the China 300 that does not move in the same way) so I pass it.

Lmax. Lmax is an Forex exange, you are not trading against it. The CFD on Lmax is provied by third party Liquidity providers such Godman sach, Citi...You know the big names. the spread is not high, for Lmax charges 0.0025% as commision.

FCXM, CFDs not move in the same way with the real contrac (Hong Kong 50, for HSI contract).

Forex.com, spreads of CFDs are too high, observed this mornning(Beijing time), is it because it's a holiday?

Overall I choose Oanda, for it's an honest broker and their spread is not high, and their CFDs move the same way with.

Lmax and CMC are also recommed. I think the actual cost of Lmax is not cheaper than Oanda, for their CFD does have spreads and they also charge commision. CMC provids small face value CFDs.

As for IG, you should make more observation on their CFD, for the China 300 I watched is not a popular one.

I think when trading CFD, watching the real markets data is critical.

The reasons why they offer CFD I think are: 1. The law of large number, most people would lose, this is a plus for the broker; 2.The High leverage makes people more easy to lose, another Plus for the broker; 3. Every trade you make, they earn the spread, that's a fixed income for them, like insurance company cellect a premium, third Plus for the broker; (4). Those bucket shops (not so decent brokers) just adjust the price of CFD against you to make you lose or ban you if you consistent win from them.

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