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| Monday, July 30, 2007 |
| The purpose of CFDs |
Recently I have been reading lots of books that tells us which are the important things to look out for in building a trading system. I realise that the role of CFD has somewhat changed. In the past, I used CFD as a short term trading instrument to magnify my gains but tracking short term movements is never easy as you can see from the price shock a fortnight ago and the recent corrections. Furthermore, pyramiding strategies might erode profits as the returns per unit risk gets lower and lower each time, even though it can be argued that the peak could be much higher.
Entry points will still be determined by simple MA crossovers, assuming that its mid-term indicators are indicating an uptrend. Breakouts should be taken into considerations as well.
Re-entry positions will be determined by it hitting the crossover lines. This can be treated as a "cross-over"when it bounces back up. The assumption is that weekly/monthly indicators are up as well.
P.S Today is an interesting day, after I screened my stocks today, I think I could forsee some uptrends.
So the problem comes in. What role does CFD play? Next time when I'm working, short term will not be the right answer. So I guess it will have the exact same role as my normal funds, only thing is that its risk and returns per unit cost is magnified, thus position sizing has to be looked after.Labels: NenixDreams Fund |
posted by Nenix @ 6:03 PM   |
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| NenixDreams Fund |
| Fund launchprice on 1st August 2006= $1
Target for 2007 = Beat STI index
Current price of NDF as of 1st Oct 2007 = $1.58
Current price of STI as of 1st Oct 2007 = $1.54
Difference with STI index is 0.04
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