Pellicano Articles
I have been trading CFDs in Australia since they were first launched in 2003. Over this period I have traded with all of the main CFD providers in Australia first hand. When speaking to groups of traders at investing expos and seminars all-around Australia I frequently get asked who is the top CFD provider? I wrote this review to help answer this million dollar question.
This review covers all the major CFD providers in Australia that I have traded with first hand, when writing this review I took into consideration four main elements which as an expert trader I feel are the crucial requirements to think about when selecting a CFD provider, they are:
1. Customer Service
2. Platform stability and ease of use
3. Product range
4. Pricing
You must to note that there are CFD provider reviews conducted by a variety of internet sites and magazines in Australia many of which are biased with the winners often being chosen by journalists not traders and determined by the amount of cash spent on advertising in the magazine or on the web site that carried out the review. Only real traders with real life experiences are able to carry out a fair an unbiased review.
The main players in the CFD industry in Australia are:
· IG Markets
· CMC Markets
· International Capital Markets (IC Markets)
· MF Global
I did not conduct a review of Etrade or Comsec as these companies are simply resellers of MF Global’s CFD offering.
In this review I talk about my real life experiences with every one of the providers mentioned above whilst considering the four essential elements that I regard as vital when choosing a CFD provider.
IG Markets
Customer Service: I have had an account with IG Markets for the last three years I use this account as my backup account. Over this time I have found that their customer support has declined a lot, in-fact at on one occasion I was unable to make contact with a dealer as they were all busy. In general I regard their customer support to be inadequate and would not recommend them.
Platform stability and ease of use: I use both their Pure Deal and L2 trading platforms and have had troubles with both. Recently I experienced the problem of being unable to look at my positions and free equity preventing me from trading all morning. I would not regard either of their platforms as suitable for a professional trader.
Product range: IG Markets has a fantastic product range, this is without doubt one of their strong points. One thing I’d say is that if you are looking to trade CFDs on exotic futures contracts and forex pairs IG Markets is certainly not the CFD provider for you as they tend to stick with a fairly mainstream offering.
Pricing: On Australian share CFDs IG Markets has competitive pricing, their minimum commission on share CFDs is low and their spreads are tight on the main currency pairs, however for anyone who is an active trader and are looking for volume discounts don’t bother trying to negotiate with IG Markets their commission schedule is fixed.
CMC Markets
Customer Service: Out of all the CFD providers that I’ve ever traded with I’ve found CMC Markets to have the worst customer support, with CMC Markets your problems start as soon as you call them up for support and choose a number from 1 to 10 just to speak to someone. I have also found their support staff to possess only a basic knowledge of their platform. General queries and problems frequently must be escalated to more senior staff, not the sort of support a professional trader demands.
Platform stability and ease of use: In recent times the stability of their trading platform Market Maker has improved significantly, however the trading platform still lacks functionality such as course of sales for share CFDs, something an experienced trader demands.
Product range: CMC’s product range is extensive and not dissimilar to that of IG Markets though it is worth noting that CMC offers an exceptional range of CFDs over exotic futures contracts and foreign exchange pairs, precisely what is absent from IG Markets product offering.
Pricing: Like IG Markets CMC markets provides good entry level pricing but lacks the pricing flexibility required when it comes coping with high volume traders.
International Capital Markets (IC Markets)
Customer Service: I had not heard about these guys until about one year ago. After calling them up and talking to one of their sales staff I thought I’d give them ago. My experience to this point has been second to none. Their customer service is top notch. Despite the size of my trading account I have my own dedicated account manager that knows the market and what I need, this is incredibly different to the call centre operations of IG and CMC Markets.
Platform stability and ease of use: They offer a variety of trading platforms to cater for a varied range of clients. They’ve got a platform for novices, intermediate and advanced traders. As I’m an experienced trader I chose their advanced trading platform Pro Deal which offers all the functionally an experienced trader needs. Although I can not speak for all of their platforms their advanced platform has been problem free and I’d definitely recommend it to anyone.
Product range: All of the products absent from the two major providers like futures, DMA functionality and exotic foreign exchange pairs are offered by these guys. Whilst writing this review I couldn’t think of a product that these guys couldn’t offer.
Pricing: Like many of the CFD providers reviewed these guys offer excellent entry level pricing, however the difference with these guys is that they also have a flexible pricing structure for frequent traders. As I am an active day trader they were prepared to drop their minimum charge and offer me a commission rate of 0.04% on DMA CFDs, the best rate offered to me by the other providers was 0.08%, they are 50% more affordable!
MF Global
Customer Service: At first I believed that these guys would take the cake on the customer service front, however unfortunately their high level of service didn’t last for more than one week after funding my trading account, this was quite astonishing and not something that I’d have expected. Once I was up and trading these guys did not want to know me, this type of customer support leads me to rate them as the worst of the lot.
Platform stability and ease of use: These guys offer one trading platform for CFDs, webIRESS. Even though webIRESS is a superb trading platform they do not offer anything else, in comparison with IC Markets who offer webIRESS as well as many other platforms. Their offering is basic and not what a professional trader demands.
Product range: MF Global offers you all the futures contracts you could ever ever imagine however when it comes to forex, CFD and share trading they cannot compete with the likes of IC Markets. If it’s only futures you want than these are the guys to speak to, but for CFDs you should give them a miss.
Pricing: The entry level pricing for CFD trading at MF Global is pricey, they do however offer packages for frequent traders with discounts right down to 0.08%, this is still a far cry from the 0.04% offered by IC Markets. Although the CFD commission rates are pricey I am sure that if you were only trading futures you could possibly get some great pricing from MF Global
Conclusion
As a professional trader I’m quite demanding in what I expect from my CFD provider, I am sure that this isn’t the norm for most traders. There was really only one CFD provider from those reviewed that could give me what a professional trader would demand, the remainder of the CFD providers have great offerings that may suit an normal trader but when pushed to their limits might falter, this is something a professional trader cannot afford to have happen when capital is on the line. Apart from my number one choice IC Markets I would chose IG Markets as my backup, regardless of their shortfalls they do have relatively good platform and a broad product range. There is however a big difference in customer service and pricing of IG Markets product offering compared to my primary choice, IC Markets.
Tags: cfd, forex, investing, shares, Stocks
Posted in Stocks · September 2nd, 2010 · Comments (0)
What are the most powerful CFD trading secrets to guarantee profitable trades and minimal drawdowns? Today we’ll glance at the best CFD tricks you can get.
The golden rule of trading success has always been to lessen your losses off short and to enable your benefits run. As a common rule your exit scheme will contribute the most to your capability to let your benefits run. A lot of studies and statistics have been run on very simple trading strategies that have high reward chances like a very easy moving average crossover system.
Those that have traded using moving averages will realize that losses may get out of hand if you don’t have a stop-loss scheme in place to protect the downside. For the purpose to minimise the downside it is essential to set a stop-loss that defends your first trading capital. Next to this it is essential that you never move this stop-loss down. Moving your protective stop-loss down is the quickest path to the poor house.
That next trading secret is to assure you are 100% done to hitting your stop-loss when your position moves against you. The most damaging trading habits available is to set a stop-loss and notice your position move down toward your stop-loss and then continually move your stop-loss further and further down. As you are acting out of fear it is an inevitable that your lower stop-loss will obtain hit resulting in a much larger loss than initially anticipated.
As the majority of individuals start out trading shares, it is not so usual to find a broker with a stock that was firstly planned as a short-period trade and as a result of moving the stop-loss down has now turned into a long term hold for the next 5 to 10 years. Professional traders know the necessity of getting disciplined with stop-losses when utilizing no leverage prior to selling any type of leveraged output. Do not forget about the fact that, leverage only compounds your mistakes.
When it goes about trading CFDs it is essential to begin with small and build your confidence as you keep going. This is probably one of the biggest secrets that is as a rule ignored to the detriment of nearly every trading account. Gathering experience grasps time and in the early days it is not so usual to have one mistake that results in a larger than normal loss, hence the cause to begin small.
You will notice the tips listed above aren’t indeed secrets but in exchange for are the main strategies to long-term success in the CFD trading.
Tags: cfd, forex, investment, shares, Stocks
Posted in Stocks · August 31st, 2010 · Comments (0)