Handbook On CFDs Trading: How to Make Money When the Market Is Up or Down

Nicholas Tan

Description

This book is written for traders and investors who want to take advantage of CFDs in their trading. It shows you how CFDs are traded and the strategies you can use for both bullish and bearish market conditions. This book is written to help you to increase your probability of success when trading CFDs.

With CFDs, traders and investors can now grab new trading opportunities across the global financial markets and trade with more financial instruments. With CFDs, you can trade in both bearish and bullish markets. You can make money when the markets move Up or Down! You can trade Singapore stocks, US stocks, Hong Kong stocks, UK stocks and worldwide indices in just one single trading account using CFDs.

CFDs is a double-edged sword. If you know how to trade it and use it in your trading strategy, you can reap good profits using a small amount of capital as it is a leverage product but at the same time, because it is a leverage product, it can cause you to lose big amount if you have yet to master the art of trading CFDs.

This book will not only show retail investors and traders the potential profits they can make trading CFDs but at the same time educate them of the trading risks and take the necessary actions to minimise them.

Sujets

• Securities
• Investments
• Economie gestion
• Economics
• Business
• Stocks

Informations

• Publié par: eBookIt.com
• Date de parution: 15 août 2013
• Nombre de lectures: 0
• EAN13: 9789810727758
• Langue: English

Extrait

H ANDBOOK ON CFDs T RADING
Nicholas Tan Foreword by Goh Kheng Chuan
Published by
Rank Books
www.rankbooks.com
Published by: Rank Books Blk 1002 Toa Payoh Ind Pk #07-1423 Singapore 319074
www.rankbooks.com
ISBN 978-981-07-2775-8 Cover Design and Typeset: Rank Books
All Rights Reserved. No part of this publication may be reproduced or copied in any form or by any means - graphic, electronic or mechanical, including photocopying, recording, taping or information retrieval systems - without written permission of Rank Books.
Conditions of Sale: This book is sold subject to the condition that it shall not, by way of trade or otherwise, be lent, resold, hired out or otherwise circulated without the publisher’s prior consent in any form of binding or cover other than that in which it is published and without a similar condition including this condition being imposed on the subsequent purchaser.
While every reasonable care is taken to ensure the accuracy of information printed, no responsibility can be accepted for any loss or inconvenience caused by any error or omission. The ideas, suggestions, general principles, examples and other information presented here are for reference and educational purposes only. This book is not in anyway intended to give investment advice or recommendations to trade. The author or publisher shall have no liability for any loss or expense whatsoever relating to investment decisions made by the reader.
Acknowledgement:
Special thanks to NextVIEW Pte Ltd for granting the permission to reproduce the charts that appeared in the respective pages in this book.
Foreword
Books on investment related topics have always been dominated by western authors in the Singapore book market. Few are written in the local context using examples that Singaporean investors can relate to.
The name Nicholas Tan is a rare gem that one can find on the bookshelves in Singapore whose books are as popular and if not more popular than imported titles. There are not many traders who are also authors in Singapore but Nicholas Tan has excelled in both areas. As a trader, Nicholas Tan has more than 20 years of trading experience in forex, stocks and CFDs trading and as an author, he has written two bestselling books on forex trading. I must credit him for his ability to make complicated investment concepts so simple for the lay people.
To write a book requires knowledge, time and effort, but to write a good book requires the art of simplicity. It is this art that differentiates a best-selling author and a author who writes solely based on what he knows.
This book is a valuable asset that encompasses important aspects of CFDs trading and retail investors and new stock traders will benefit immensely from the information in the book.
Goh Kheng Chuan
Author of “Handbook For Stock Investors”, A National Bestseller
Preface
The internet and online brokers have brought about new instruments of trading and it has led to the opening of new markets to trade. Retail investors and traders are not limited to trading stocks of their own countries but they can also now trade a variety of instruments such as options, forex, commodities, and contracts for difference (CFDs) of different markets.
This means that traders and retail investors now have more ways to profit from these various instruments and markets. Contract for difference is a relatively new trading instrument in Singapore. This is the first guide on CFDs trading ever written and published in Singapore.
This book is written for Singapore traders and investors who want to take advantage of CFDs in their trading. It shows you how CFDs are traded and the strategies you can use for both bullish and bearish market conditions. Unlike other CFDs books published by overseas authors, this book is unique as Singapore stocks are used as examples when explaining how a trading strategy can be applied.
CFDs is a double-edged sword. If you know how to trade it and use it in your trading strategy, you can reap good profits using a small amount of capital as it is a leverage product but at the same time, because it is a leverage product, it can cause you to lose big amount if you have yet to master the art of trading CFDs.
I hope this book will not only show retail investors and traders the potential profits they can make trading CFDs but at the same time educate them of the trading risks and take the necessary actions to minimise them.
I wish you every success in your trading.

Nicholas Tan
Also Author of “Handbook On Forex Trading”, A National Bestseller and “Forex Trends and Profitable Patterns”.
About the author
Nicholas Tan has more than 20 years of experience in the area of foreign exchange (“forex”) trading. He worked for 13 years as a forex trader with banks in Singapore, gathering much invaluable experience in the process. He rose from the ranks to vice president, making millions for the banks in those years.
From 2005 to 2008, Nicholas Tan was involved in the Diploma in Wealth Management Course at a private institute where he taught as a freelance lecturer, a module on forex and CFD Trading (stock market).
In conjunction with Rank Books and Rank Seminar, Nicholas Tan has been running a monthly forex trading course since 2007. This class is now Singapore’s longest running forex course, and has exposed hundred of participants to his simplified yet highly effective forex trading techniques.
Nicholas Tan is also the author of two best sellers; “Handbook on Forex Trading”, an easy guide to profitable currency trading, and, “Forex Trends and Profitable Patterns” an easy guide to spot profitable trends and patterns in forex. Handbook on Forex Trading was ranked among the 10 Top Best Sellers in Popular bookstores in 2007 for several months. Both books are still best sellers in local bookstores till today.
Nicholas Tan has been featured in the Channel News Asia program, “Cents & Sensibilities EPISODE 6 - Money, Money, Money: Forex Trading”. On national television, he has given advice on how one can maximize their gains on the forex market. You can catch him at http://www.channelnewsasia.com/cents/episode6.htm .
Besides a Bachelor Degree in Business Administration from the National University of Singapore, Nicholas Tan is also a Certified Financial Technician (“CFTe”). This is an elite certification from the International Federation of Technical Analysts, given to a handful of qualified technical analysts across the world after passing their rigorous examinations. As of today, there are not many CFTe holders in Singapore.
Contents
Chapter 1 What is CFD?
What is a CFD?
Types of CFDs Price of CFDs How to Get Started?
Margin Trading and Leveraging Why Trade CFDs?
The disadvantages of CFDs Risk Management in Trading CFDs
Chapter 2 CFD Trading for Hedging
Equity — Hedging with Individual Stock
Equity — Hedging with High Beta Stock
Equity — Hedging with Index
Chapter 3 CFD Trading Using The Pair Spread Strategy
CFD Equity Pair Spread Trading
Within Equity Sector
Across Equity Sector
Inverse Strategy Using CFDs
CFD Index Pairs
Chapter 4 Directional CFD Trading Strategies Using Fundamental News
SGX Research Website
Using Fundamental Information for Trading
Corporate Earnings
Broker Analyst’s Report
Making Sense of Analyst’s Report
Not All Brokers’ Reports Are the Same
Implementing The Strategy of Trading on Fundamental Information
Trading on a Company Reporting Better
Quarterly Earnings
Using CFD for Leverage
Chapter 5 Directional CFD Trading Strategies
Using Gaps
What is a Gap?
Common Gap
Breakaway Gap
Midway Gap
Exhaustion Gap
Japanese Candlestick Pattern
Trading Momentum Retracement
Indicator Explanation
Momentum Retracement Long Position Setup
Momentum Retracement Short Position Setup
Chapter 6 How to choose a CFD Broker
Regulation
Markets and Products
Brokerage Fees or Commission Rate
Platform Type and Software Features
Inactivity Charges
Minimum Sum
Funding Options
Training Programs
Margin Requirement
Interest Charges
Chapter 1: What is a CFD ?
In a financial crisis when bad news rules the market, there is little an investor can do if he or she is trading with shares. The only thing he can do is to cut his losses or wait at the sideline for share prices to fall till rock bottom levels and buy them cheap to sell when prices go up again in order to make a profit. However, this could take a year or two before the bear market ends. This is because when you trade shares, you are not allowed to short the market — selling shares you do not own, for a profit. Hence, during the financial tsunami which started in late 2007 till 2009 while most investors are either busy cutting their losses or counting their paper losses, a group of traders who knew how to trade using CFDs were smiling all the way to the bank.
This section covers the basics of CFDs and how it works in both rising and falling markets.
What is a CFD?
CFD stands for contract for difference. A CFD is simply an agreement between two parties (you and your broker) to exchange the difference between the opening price and the closing price of a contract.