Jump to content

Why do I lose money even when my CFDs trading is Profitable


Recommended Posts

Hey everyone,

I've just started a Demo account exploring how to trade CFDs however, what I've noticed is that despite I made a small profit there through a few trades I kept losing my funds value. The way I understood CFDs simply that it magnifies your returns whether it was profits or losses. But the confusing for me is that in my case should profits trades overcome the losing ones. Any explanation for that?

For the below tradings, my funds went from 10,000 to 9,812.93! A 187 short?

Capture.JPG

Capture.JPG

Edited by JSmoney
Link to comment

It is worth looking at the spread betting account option as if you are taking small size positions for shorter time periods, you need a big move to make enough cover the quite high fees and still make a profit. Forex does not have commission on CFD's but stocks and I think Indexes do. Spread betting has a larger spread to overcome but can work out a cheaper way to enter and exit trades if they are small and not held for larger moves.

 

  • Like 2
Link to comment

Above American Airline is share of a company and you pay a additional set fee for buying and selling it which is  £12.12 in this case.

Wall Street Cash index is spread betting  and difference between buying ans selling is the spread added or included within the trade. So  you don't see it separately.   

 

  • Like 1
Link to comment
  • 4 weeks later...

So you are down at least £20 to start with every time you decide to open a position? That seems like a pretty bad deal. 
Wasn't there a smaller commission/trade cost if more than a certain amount of trades are placed in a month? 
It just seems strange. If you're averaging say 4-5 trades a day you get a £100 dent into your profits (supposing you are profitable on all the trades). Seems unreasonable.

  • Like 1
Link to comment
20 hours ago, Msim224 said:

So you are down at least £20 to start with every time you decide to open a position? That seems like a pretty bad deal. 
Wasn't there a smaller commission/trade cost if more than a certain amount of trades are placed in a month? 
It just seems strange. If you're averaging say 4-5 trades a day you get a £100 dent into your profits (supposing you are profitable on all the trades). Seems unreasonable.

If you're from the UK you can trade stocks on a spread betting account. The fee would be the spread x your bet size. 

You may find this more cost effective for your trading strategy. 

  • Like 1
Link to comment
4 hours ago, CharlotteIG said:

If you're from the UK you can trade stocks on a spread betting account. The fee would be the spread x your bet size. 

You may find this more cost effective for your trading strategy. 

It is definitely the only reasonable option for a frequent or intraday trader. 
Another thing that seems to go against the concept of profitability (in both spreadbets and cfd accounts) is the minimum stop loss distance: in most of the assets it's 2% which is a HUGE gap, and makes it impossible to place a reasonable position. I've seen it explained as a way to avoid slippage risks on volatile markets, but it is literally on basically on 90% of the shares listed, and some that don't have the 2% seem to be some of the most volatile assets. 
It is incredibly limiting and puts the investment at unnecessary risk.
Something should definitely be done about this. 

  • Like 2
Link to comment
On 10/06/2020 at 13:09, Msim224 said:

It is definitely the only reasonable option for a frequent or intraday trader. 
Another thing that seems to go against the concept of profitability (in both spreadbets and cfd accounts) is the minimum stop loss distance: in most of the assets it's 2% which is a HUGE gap, and makes it impossible to place a reasonable position. I've seen it explained as a way to avoid slippage risks on volatile markets, but it is literally on basically on 90% of the shares listed, and some that don't have the 2% seem to be some of the most volatile assets. 
It is incredibly limiting and puts the investment at unnecessary risk.
Something should definitely be done about this. 

 

Other members have mentioned the large minimum stop distance. I have relayed the message to our exposure/ risk teams to see if they can be tightened. 

  • Like 1
Link to comment
  • 3 weeks later...
  • 3 months later...
Guest Elizabeth Ruth

 

Hello everyone,are you interested to trade with binary options or you are looking for an expert to trade and manage your account for you or Do you have funds you wish to withdraw from your binary broker? or you are having problems with the withdrawing of your funds and you don't know how to go about it. Kindly get in touch via   adamwilson.trading (at) consultant . com, and he will guide you on how to get back your funds within 72hours

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,987
    • Total Posts
      87,947
    • Total Members
      69,135
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    _vlad_
    Joined 25/09/22 08:09
  • Posts

    • Hey @pravid17 I hope you're well.  In the leveraged trading industry there are brokers who don't hedge client's exposure and brokers (like ourselves) who do hedge client's exposure.  In a perfect world the exposure of short clients would net off the trades of long clients however this is not always the case. Our hedging model allows us to take an exposure in the underlying market for the remaining exposure which doesn't offset - This way we don't need to hedge every trade, worry about profits of our clients and results in lower costs for hedging in the underlying market (commissions, interest etc.). So say 60% of IG customer exposure in the ASX was long and 40% of exposure on the ASX was short. The 40% would net each other off but there's a remaining 20% of customers who need to be hedged to cover their positions. We go into the market and hedge this.  We make our money primarily through our spreads and overnight funding  with other fees making up a small proportion of our revenue. I would like to remind also that IG is regulated by several bodies globally, including top-tier regulators like the UK's FCA, Germany's BaFIN, Australia's ASIC - This should be quite reassuring from a dealing execution and transparency perspective.  I hope this helps, let me know if you have any other question 
    • A survey from Reviews.org, which featured 1000 Americans, found that as many as 1 in 4 US subscribers may quit the service in the next year.    Jeremy Naylor | Writer, London | Publication date: Friday 23 September 2022  There was an interesting breakdown, but the main reason was affordability. Only 18% said they would move to a cheaper competitor. IGTV’s Jeremy Naylor looks at the numbers. Netflix subscription woes Netflix Inc (All Sessions) could be in for a rough time ahead over the next 12 months if a new survey is anything to go by, which was conducted in the US. Out of the 1,000 adults that took part in this survey undertaken by Reviews.org, around 25% of those that were covered said that they would be cancelling their Netflix subscription within the next 12 months. Now, it says with that 25% of US subscribers to Netflix considering leaving, not to join a competitor, but mostly because of pressures on household bills. This is how it is split: rising cost of subscriptions - 40% inflation - 20% a lack of content - 22% spending more time on the services of others - 18% So you can see, a minority said they were going to other services, such as those provided by Disney Plus or Amazon Prime. The cost of Netflix has risen dramatically this year as its basic plan increased by 11% in January and its other plans by 20% to 25%. Now these were the first price increases for three years, so that itself is relatively new for a lot of subscribers. Netflix share price Let's take a look at the Netflix share price. You can see on the far left hand side of this chart the COVID lows at $290.39. We saw a whacking great increase there of 141% to the top and the record high in Netflix shares back in November 2021. And that was when subscriptions were rising, people were paying more for their services, and it was all humming beautifully. And then all of a sudden people started questioning the numbers of streaming services they were undertaking with some deciding to withdraw from Netflix. All of a sudden the big drops started coming through with profit warnings and sales warnings. We've recently hit a new low of $162.50. Since then there has been a little bit of an increase. We're currently trading at $232.75, but we are down by a margin of 1.75% in today's session, which reflects this news that we could well see a relatively large drop in subscribers for Netflix in the US within the next 12 months.
    • Market data to trade the week of 26 September: Nasdaq; NXT From the economic calendar next week IG technical analyst, Axel Rudolph, picks up on a short trade on the Nasdaq around US inflation data. Meanwhile, despite another light week of corporate data, Axel picks out the chart of Next plc (NXT) as an interesting trade to think about.          
×
×
  • Create New...