CFD - No Guts, No Glory (Part 1)

I wrote about Contract for Difference (CFD) a couple of days ago and how it has potential for great earnings while it carries a higher risks due to its leveraged nature. However, if that's your cup of tea, then you should really look at SimplexFX if you are not already on it.

SimpleFX is an extremely powerful and yet easy to use platform for CFD trading against multiple types of assets; ranging from forex (currency), cryptocurrency (bitcoin), indices (DJI), commodities (oil), precious metals (gold) and equities (APPL). It's a one-stop shop for CFD!

Once you get onto SimpleFX, it automatically creates a demo account for you. To trade, you will need a live account and creating one is simple and easy; just follow the onscreen instructions and you cannot go wrong. From there, SimpleFX offers a number of choices for funding your account.

Funding options for SimpleFX

If you are based in Singapore,  I suggest you fund it through Telegraphic transfer. It will take somewhere between 30 mins to 8 hours depending on the size of your transfer. Once funded, you can begin trading immediately. Below is a screenshot of what you will see as the 'dashboard' or 'trading wall' of SimpleFX.

SimpleFX Trading Wall/ Dashboard

There are numerous write up that already talked about SimplexFX and you can also find a number of guides on using SimpleFX. Therefore, I shall simply cover my experience on using SimpleFX in this write up. Feel free to hit me up if you have questions too!

In the example above, I have tiled my charts on my live account but you can also arrange them in tabs.

The chart tells you everything! 

SimpleFX draws a line to indicates where your open price whenever you place an order. The current price is marked by solid lines, green for buy and red for sell. You're profitable if the red line keeps above your greens and the green line keeps above your reds. That's it.

Your account details (balance, profit, margin, equities etc) are are all visible at a glance.

In addition, SimpleFX also provides advanced charts (free)!

SimpleFX is also extremely easy to use 

With 'one-click trading' enabled, you can place orders by simply clicking buy or sell after changing the trade size. 

One-click to Order

Similarly, you can edit (pencil) or close your orders (x) with one-click.


One-click to Edit/ Close Positions

What I love most about SimpleFX is the margin level indicator at the bottom left. Since CFD technically has no expiry and is dependent on your margin allowance. This indicator is an important and useful information to have on display.


Margin indicator

You do not have to manually calculate how much margin you have left, SimpleFX does it for you. In fact, if you are running low on margin, it automatically prevents you from opening up more positions and over-leveraging!

Bonus

All these functionalities are on mobile too! You can download the iOS version of MetaTrader 4 and connect it to your SimpleFX account to start trading. You can find the guide on connecting to SimpleFX here but basically, you will need to reset your password and connect using our account number.

Summary

I have been using SimpleFX for a while now and am very satisfied with the result. Below are some pointers on CFD trading that you can consider.

• Trade in only assets that you are familiar with. For example, USDSGD (forex), BTCUSD (bitcoin) or XPDUSD (Palladium). The reason is simple - you are consciously and subconsciously aware of news that affect the currency movement (i.e. GDP, inflation control measures etc)
• Trade in small steps and keep your margin level above 100% when opening up new positions. Target small profits but accumulate them through multiple trades
• If you're uncertain of the market direction or when the market goes sideways, use a butterfly spread as your trading strategy.

As a standard disclaimer, there are risks with all kinds of trading and especially so with CFD. Deposit and trade only what you are prepared to lose.

Note💡Turning on FIFO will allow you to enter opposing trades. Otherwise, SimpleFX will automatically consolidate your orders.

Important❗️Take note of your margin level. SimpleFX will automatically close out your largest order if it drops below 30% and all orders if it drops below 5%.

Important❗️If you have to hold your trades overnight, take note of the Swap (rollover) charges. SimpleFX has a higher swap rates than most trading sites (especially on Bitcoin) that can easily eat up all your profits.