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Discussion in 'The Trading Floor' started by nottibird, Sep 28, 2013.

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  1. nottibird

    nottibird Moderator

    Oct 25, 2012
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    There are 3 things a trader who wants to be successful should learn to do :

    1. Train yourself to find the bolas to add positions when your stock has bottomed out and U-turned back up
    or has topped out and has U-turned back down.

    2. Whilst waiting for the price to reach your home run target, train yourself to profit from your stock by doing
    chicken runs at the sides. Just becoz you are holding a stock longer to score a home run, it does not mean
    you cannot also do chicken runs with it.

    3. Another thing which a trader who wants to be successful must learn to do ... is to HOLD your winning positions
    longer when conditions are favourable and calls for the trader to ride his positions for more upside.

    The usual set up when conditions are favourable for a trader to hold his positions longer to maximize his profits is when a good Sure Cum
    stock falls and falls due only to weak sentiments (not due to a sudden deterioration in its fundamentals) and then makes a U-turn when
    sentiments improves and turns positive and the price action tells us that bears have turned bull to buy and bulls have turned even more
    bullish to add. In the past, when I buy a falling stock which is on its way down, I languished whilst it was still finding its bottom. Then one
    day when the stock turned and started to rebound, my focus on grabbing the lifeline thrown to me overshadowed and blinded me to quickly
    seize the opportunity to get out. As a result, when the price rebounded to 1 or 2 bids above my entry price, I threw back and took the 1 or
    2 bids happily. Every Platoon I had committed into the fight at various entry levels, I was happy to take 1 or 2 bids from each Platoon. When
    the price had rebounded to above the highest of my Platoons, on hindsight, I realised I could have made 4 or 5 or 6 times more if only I had
    held on to all my Platoons right until the price recovers to above my highest Platoon. So after learning this lesson many times, I decided to
    bite teeth and squeeze balls and teach myself to hold on and dont sell too early when conditions are favourable for me to continue to ride on.

    And that was precisely what I did in January 2017 when I held on to all my positions in CapitaComm to hitch a ride on the monkey who was in
    the driver's seat for Dividend Play. I remember Mei and bro oppa were with me in that trade. Both of them took profits chicken run style on the
    way up. What they did was what I used to do. But that time round, I didnt. I had to cross nipples and tie myself to my toilet bowl initially. But after
    getting the hang of it, I discovered that I could do it without requiring a Chio Bu to tie me to her bed anymore. For the 1st time ever, I experienced
    riding on a winning position ostrich run style and it was exhilarating to see my paper proftis go up with each passing day. Enduring the intermittent
    pullbacks during which I saw a couple of thousands shaved off from my paper gain, was part and parcel of the game. It is inevitable to do Tango
    becoz stocks do not move up in a straight line. Had I taken profits chicken run style, I would have made around 3500 eggs from that trade. Still good
    money. But becoz I wanted to force myself to learn how to ride a position when conditions are right, that ostrich run yielded 14,688 eggs. That's 4.1
    times more !!! So this is what a trader must learn to do - resist the urge to take profits and ride your positions for more upside when conditions are right.
  2. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:

    I posted this at The Trading Floor - February 2017 thread on 24 Feb 2017 just after midnight to announce my
    decision to go full time in the market.



    What I have been dreaming of and looking forward to for years... have become a reality. At last.
    On Monday, I tendered my resignation. Boss asked me to reconsider. He said...
    "As a friend, can you stay and help me to keep this place going?"
    I replied... "As a friend, can you be happy for me that I can finally do this as being able to do this is a luxury and a privilege?"
    He then sighed and conceded... "Yes, as a friend, I should be happy for you."
    When I said that I was also getting sick of the work, he asked if I could consider staying on in some other capacity...for example as an office manager.
    He asked me to think about the "some other capacity" proposition and thereafter talk to him if and when I am ready. I know he wants me to stay primarily
    to act as a be available to him as and when he needs to consult me on legal issues. That's why he suggested that I stay on as an Office Manager.
    So that he can still have me 24/7 as his consultant and at the same time, I dont have to do the work (which I said I am sick of) anymore. In my mind, whilst he was
    talking, I was telling myself... "But if the market is enough for me, I want my freedom and independence. I dont want to be tied down by a job anymore. The luxury
    of drawing a salary comes with obligations one of which is to be at the office for work from 9am to 6pm. I dont want that !!!"

    At my office, the photocopying machines are located next to the pantry area. Without fail, I will go to the pantry everyday be it to get water, or to make a drink or
    to take something from the fridge. And everyday or every other day, I will talk to my kopisoh and my photocopy girls... joke with them...SUAN with them.
    Very often, I will buy them small treats like snacks and savoury stuffs. So of course, they all like me and look forward to my daily visits to the pantry area as a form
    of stress relief therapy for them. This morn, my kopisoh asked me whether I am going to start a new business or to open my own firm. She asked if I could bring
    them along. [​IMG]

    Two girls who used to work with me for many years said to me they are happy for me that I can get to do this - retire so early. They were surprised when they heard
    the news. But they were happy for me.

    When I spoke to an opponent over the phone regarding a case, my opponent wanted an adjournment. I then requested him to ask for a longer adjournment of 8 weeks
    instead of 3 or 4 weeks so as to allow the guy taking over the case more time to study the file. I told him I am leaving the firm. On hearing that, his immediate response
    was ....... "Oh !!! I am so sorry to hear that." I then clarified... "No...No...No... not at all. I am retiring." He exclaimed ... "Oh !!! CONGRATULATIONS !!!" And although
    this is the first time I have a case with him, he started to tell me about himself and his family and about how he missed a chance to strike gold when he turned down an
    opportunity to buy from a client a property at $4.3M. He said he was then younger and was worried about whether he could service the loan for a $4.3M property. It
    would mean he cannot fall sick and cannot lose his job and that if something unexpected happens, he would lose that property and probably be sued to bankruptcy
    by the bank. But if all goes well, he would strike it rich. "You know how much that property is worth today?" he asked me. "12 to 15 million !!!" I then asked him...
    "But realistically, if you had bought a $4.3M property back then, would you have been able to service the loan from then until today to see the property value rise
    to 12 to 15 million?" He said.... "If struggle alot here and there... I think can lah". [​IMG]

    I told him..."you probably made the right decision not to take the risk becoz it is one thing to risk say a certain sum of money and lose it completely if it doesn't work
    out but your lifestyle and your family's well being is not affected .... and another thing altogether to take a risk which if unsuccessful will result in your family and
    yourself becoming homeless plus you facing bankruptcy and unable to remain in your profession anymore." I then told him that I trade the market and we traders
    have one saying... "One smaller profit in your pocket is worth two larger ones on the chart."

    My last day of work is next Friday. My last day of service is on 31 Mar as I have 20.5 days of leave to offset my notice.

    Why am I telling you all this?

    Becoz I want every sniper here to know that your dream of trading the market full time, if you have been dreaming of it.........can come true.
    But for it to come true, YOU MUST MAKE IT HAPPEN.
    If you sit around and do nothing about it and wait or hope for it to happen, it won't happen.
    If it happens, its becoz something very bad happened to you. Like you lost your job or was retrenched or your company went belly up.
    To make it happen, you must plan for it. And work towards your plan. I wrote about this a few months ago. If interested, you can read
    it here... Posting No. 23.
  3. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:

    Yes bro. I suggest you sit down and think seriously about how to work towards that goal.
    You really really need to do this if you are serious about quitting your job to do it full time.
    Going full time is a commitment and one which for some of us, there is no turning back
    becoz your previous job is not one that will wait for you. Somebody will fill that vacancy
    and you may never find another similar one. If you are self-employed and without overheads
    to worry about, then that's different. Examples of self-employed jobs where you can drop
    anytime and restart anytime are insurance agents, property agents, private tutoring, taxi
    driver, driving instructor, tennis coach, swimming coach, etc. But not if you are a Regional
    Sales Manager or IT Manager. Finding back such a job takes time and your next one may not
    be as good as the previous one.

    As I was saying, going full time in the market is something you really really need to plan for
    it to make it happen. If you didnt plan for it, it becomes just an airy-fairy vague idea you have
    about going full time which you hope will one day happen but you are not doing anything serious
    to make it happen and happen earlier. Finally when it does happen, it is becoz you were retrenched
    or you have reached retirement age and trading full time becomes the next natural thing to do.

    How old you are is not the issue. There is no such thing as too young or too old to go full time.
    But how many long term financial commitments you have, is an issue.

    Home Mortgage loan.
    Car Loan.
    Renovation Loan.

    If your spouse's income is sufficient to take care of the above, then it helps. If it isn't, then you will
    have to keep on working to pay off more of those loans and bring them down to a level where your
    spouse's income is able to take care of them.

    To have enough to cover your monthly expenses, how much do you need? We call it X.
    To be able to make X per month from full time trading, how much trading capital do you need?
    Going thru this exercise will force you to work out how much trading capital you need to have
    before you feel comfortable and confident that with it, you can consistently make X on average
    month after month. And if you need a little extra capital to serve as a buffer just in case, then
    for you, it is Trading Capital + Buffer. Only if you give this very serious thought that you can
    come up with a figure be it 200k or 350k or 500k or whatever. My experience tells me that
    to go full time with anything less than 200k is tough. Unless your X is low...say, just 2k. To
    be able to generate 2k to 5k a month using say only 100k of trading capital is possible if your
    stock pick and timing has 70% accuracy and for the other 30% of your not-so-good trades,
    you are able to cut your loss quickly to keep them small OR your IF LOSE, LOON UNTIL WIN
    strategy is successful.

    Once you know what your Trading Capital (with or without + Buffer) is, you have a target
    to work towards. Then you can start budgeting and be more conscious of your spending
    habits. You will be more mindful of how you can stretch your dollar when you spend on
    necessities and how you can cut down or remove spending on luxuries. Becoz you are on
    a mission. A mission to save up as much as possible and within as short a time as possible
    so that you can accumulate enough bullets and torpedoes to form your Trading Capital.

    But go through the exercise... you must. Otherwise it will just be a desire...a dream. But
    will not happen sooner. Unless circumstances force you into it.​

  4. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:

    DMA means Direct Market Access. What this means is that when you key in a BUY or SELL order, your order
    affects the queue in the cash market maintained by The Exchange. It is the same as you keying a BUY or
    SELL order using your cash account. So when you use DMA to sell 100 lots of counter X, the SELL queue in
    the market will show an increase of 100 lots. Likewise when you buy using DMA.

    To have DMA means your IG account must be linked to realtime prices maintained by The Exchange.
    To obtain that linkage, you must enable realtime data access for your IG trading account.
    And how to do that? You will find the step-by-step instructions below. But first, there is something
    you need to know BEFORE you enable your Data Access.


    There is a fee of $60 per mth levied by IG (deducted from your funds on the 1st of each month) when
    you enable data access. But if you do 4 trades per calendar month, IG will give you a full rebate of that
    fee. Yes. Just do 4 trades per calendar month (which is Sub Sub Soy) and your data access is FREE. The
    rebate will be credited back into your funds at the start of the following month.

    One more thing - the fee is charged on a calendar month basis. Not pro-rated basis. Today is 3 Sep.
    If you enable data access today, you will be charged immediately. Between now and 30 Sep, you must
    do 4 trades to get a full rebate of that fee. Which should not be a problem since you have almost a
    whole month to do that. But this can be a problem if let's say today is 25 Sep. If you enable data access
    on the 25th day of any month, then between 25th to the 28th or 30th or 31st of that month, you must
    do 4 trades within those few days to get your rebate for that month. So for people who dont think they
    can do 4 trades, wait till the 1st day of the following month to enable your data access.

    What is 1 trade? When you BUY and your order is hit (including partial fills), that's one trade.
    When you sell and your order is hit, that's another trade.
    If you trade big, instead of doing 1 trade of 40 lots, you can do 4 trades of 10 lots each.
    As long as your order is hit, fully or partially filled, that's one trade.

    Be mindful of minimum com though, which is $15.00 per trade.
    At 0.1%, what this means is that each trade must be at least $15,000 in order to hit a com of $15.00.
    If your trade is below $15,000, you will be charged a minimum com of $15.00 for that trade.
    And this is something you must avoid as it may make a difference between whether you can run with
    1 bid or whether you need 2 or more bids to breakeven.

    Okay, now that you know what is involved when you enable market access, here's how you do it.
    I dunno about Apps. But using a web-based trading platform viewed on your laptop...

    Click on <MY ACCOUNT> at the top right hand corner.

    Then <SETTINGS>

    Then <Preferences>

    Scroll down till you see <Direct Market Access (DMA) Equities>

    The default setting shows "Disable DMA Equities".

    Click on "Enable DMA Equities".

    Next line you will see "Show Summaries Before Submitting DMA Equity Orders".
    I dunno what is that but my box is "checked".
    Cant remember whether it was checked as a default setting or whether I checked it.

    Lastly, scroll to the bottom of the page and click on 'SET PREFERENCES" and you are done.

    But before you do that, go through the other features to see which other PREFERENCES you want.

    You may want to look at the following:


    Mine is set to "Don't Allow One-Click Dealing".

    What this means is that when I click "Place Order" for a trade via DMA, the system will ask me
    to "CONFIRM". This enables me to check my orders for mistakes or to change my mind if during
    those critical seconds, there is a change in the price action. Only upon clicking "CONFIRM" that
    my order is accepted and executed. If I allow One-Click Dealing, the moment I click on "PLACE
    ORDER", there is no 2nd chance to check for mistakes or to change my mind. The order will
    go through. For better or for worse.


    I allow mine becoz I find that being able to bring out multiple Deal Tickets on my screen is very
    critical when I want to open or close multiple trades via OTC in situations where my window to
    open or close those trades may well be very brief measured right down to seconds.


    I set mine to the max of 12 hours. You wont want your trading platform to auto log out without
    you knowing it and at a critical moment when you want to key in an order, you have to log in
    again first. You may miss the boat by the time your trading platform is ready.
  5. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    How To Increase Your Chances Of Winning

    What I say here dont apply to pennys. Becoz when a penny falls, it may never recover ever again.
    So this strategy cannot be applied to pennys. But only to Sure Cum stocks. Most index stocks are
    Sure Cum stocks. Not all index stocks are. And of those which are, some are more SURE than others.
    And that's where earnest and keen observation and study of the price action will tell you which are
    the Sure Cum ones and which are more Sure than others.

    Markets rise and fall. Each cycle can be days, weeks or months. And within each cycle, there are
    smaller sub-cycles where the stock price goes through pullbacks, rebounds or consolidation periods.
    When markets rise, they always pullback. After markets have risen by alot, they always go into a
    correction. Likewise when markets fall, they will rebound. After they have fallen by alot, they will
    recover. No matter how bad the economic data is or how bad the external game-changing event is,
    markets always recover. ALWAYS. And without exception. No IFs no BUTs.

    But the problem is we just dont have the patience to wait for a market to TOP OUT or BOTTOM OUT.
    Those of you who have been in the market long enough would have ever found yourself out of bullets
    when the market was still falling. Then when the market hit the bottom and started to rebound strongly,
    all you could do was to watch in anguish and frustration. If only you did not put all your cash in stocks
    when the market was still falling. If only you had the patience to wait. Then every stock you buy now
    into the rebound will be an immediate winner. If only. But then again, how do we know where is the
    bottom? If we just sit tight and wait for that elusive bottom, the next rebound could be the real rebound
    and if we are still not in the market, we will be left behind and will miss the boat.

    So how to have a strategy which will take care of the above such that if the next rebound is the real
    rebound, we will have bought some stocks but at the same time, if the market continues to fall, we
    will still have bullets when the real rebound comes, to show hands. Being able to show hands at a
    market bottom is VERY, VERY, VERY important. It will make all the difference between winning and
    losing in that one market cycle. The ideal ratio is 70 : 30. By that, I mean 70% of your cash went
    into the stock at/near the market bottom whilst 30% of your cash went into that stock at various
    levels whilst she was on her way down. If your ratio is higher than 70 : 30 then lagi even better.
    But very few people can do that. Most of us are 30 : 70... 70% of bullets already in the stock stuck
    at higher prices with only 30% bullets left to spare to average down when the real rebound comes.
    If your ratio is 50 : 50, then not too bad either but you will have to wait longer for the stock to
    rebound to your average price than if you are in the 70 : 30 category.

    What this means is that we will have to divide our bullets into 70 : 30 from the start and BUY or
    SHORT not more than 30% of total bullets set aside for the counter. If our timing is correct, those
    30% will be in the money and after taking profits, we restart the process over and over again. When
    deploying those 30%, we musn't send out all of them in one go. To mitigate the timing issue, we
    should use Platoon Strategy to despatch our troops platoon by platoon. How many platoons you can
    create out of those 30% of your bullets will depend on the size of your army and how many lots you
    need to BUY/SHORT per trade to hit a transaction value of $15,000.

    As long as your 30% frontline commandos continue to accomplish their missions, you continue to
    redeploy them to bring home the eggs. Your reservist battalion of 70% strong continues to be on
    standby and operationally-ready to launch a Search & Rescue Mission should the market continue
    to fall deeper or rise higher than you anticipated. When this happens, your 30% frontline commandos
    will become trapped underwater. And what you need to do is to commit no further troops to the
    fight but to wait patiently till the market has bottomed out or topped out and turned. Only then
    do you mobilise your reservist army of 70% to go into action to rescue those 30% trapped underwater.
    Knowing when the market has really bottomed out or topped out is not an easy thing. So when you
    activate your reservist army, you must also employ Platoon Strategy. Whether to be aggressive or
    cautious when you use your reservist army to do the averaging down or averaging up will depend on
    your reading of the market and your confidence level that the market has really bottomed out or topped
    out. This comes with trading experience. And some measure of luck.
  6. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:

    Those of you lizards who wish to sign up for a CFD trading account with IG,
    you can contact my Premium Account Manager, Miss Edna Tan at 98483133.
    She will assist you to open an account. You dont need to go to IG's office or
    meet up with Edna. Everything is done thru the phone plus email.

    Just mention that you were referred to her by nottibird of Sniper Academy.
    She will then know its a referral from me and she will do the rest.

    Upon you completing 5 trades within 6 months, IG will pay me a referral fee
    of $100 or $500 subject to their discretion. What I understand is that if they
    think you are a frequent trader with Premium Status potential, they will then
    reward me with a $500 referral fee. For normal traders, the referral fee is
    $100. Whatever I get, I will share it with you.

    Please remember to tell Edna your username so that she can tell me instead
    of your real name. You will have to give her your real name for registration
    purpose when you sign up for an account. Once I get the referral fee and
    your username from Edna, I will send a PM to you to ask for your bank
    account number.

    This referral fee is free money dropping from the sky. Courtesy of IG.
    No take then Pai Pai no take.

    I know a couple of you signed up with IG over the last one year upon
    my recommendation. Too bad IG wont accept old cases for referral fee
    redemption. Only fresh cases and ONLY IF you contact Edna to do the
    signing up for you. If you sign up directly at IG's website, Edna will not
    be able to assist me to claim the referral fee.

    Also, if you intend to open a Demo Account, please contact Edna to help
    you set it up. Otherwise when you subsequently contact Edna to open a
    live account, Edna will have difficulty explaining to her boss to allow your
    account to be treated as a referral from me. This is becoz you had set up
    the Demo Account on your own. So IG will regard you as a direct walk-in
    client and not as a referral from me.
    Last edited: Dec 9, 2015
  7. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    Part II

    How Come I Can Run With 1 Or 2 Bids And Yet Still Make More Than A Cash Account Trader?

    The advantage of trading with a much lower com becomes even more evident when you play the heavyweights.

    Let's take UOB as an example. She is currently at 23.35 to 23.60. This was Friday's range.

    Let's say both the cash account trader and CFD trader managed to BUY at 23.35 and sold at 23.60.
    Trade size is 2 lots. How do their results differ?

    Cash Account : $178.49.
    CFD : $415.49.

    Becoz of lower com, the CFD trader makes $237.00 more than the Cash Account trader.

    When a Cash Account trader BUYs UOB at $23.35, his com is $159.90. He needs 16 bids just to breakeven.
    If the stock runs by 17 bids and the trader sells because the market suddenly turns, he makes just $10.00.
    His broking house will pocket the other $160.00. So the harsh reality and astonishing truth is that all the
    hard work is done by the trader and all the risk is borne by the trader when he makes that trade. And when
    he gets it right and the stock runs 17 bids, he gets to keep only $10.00. His freaking broker who didnt do
    anything and did not have to carry any risk whatsoever gets to pocket $160.00 !!!

    Whereas for a CFD trader, when he buys UOB at $23.35, his com is $42.03. For an intraday trade, this trader
    can run with small profits after seeing only 5 bids. If the stock runs 17 bids, the CFD House earns 4.2 bids.
    The CFD trader keeps 12.8 bids. Now, that sounds ALOT ALOT fairer, isn't it since the trader is the one who
    did all the hard work and carried all the risk.
  8. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    Part I

    How Come I Can Run With 1 Or 2 Bids And Yet Still Make More Than A Cash Account Trader?

    I trade wholly and exclusively via a CFD account. I am with IG Markets. Their standard com
    for new sign ups is 0.1% of transaction value inclusive of GST. I am a Premium Account holder.
    So I pay 0.09%. How to be a Premium Account holder? Just trade as frequently as you can.
    When you are frequent enough, IG will contact you to say they have identified you as a high
    frequency trader and they will upgrade you to Premium status. Or if you think you are regular
    enough, you can contact them and ask to be upgraded. I understand their guideline for "high
    frequency trading" is $5M in transaction value per month. When I discovered this, I was stumped
    too. My immediate reaction was " I got buy/sell $5M a month mare?" [​IMG]

    Maybe when I was trading Botak and Dumbo in 30 to 50 lots during their Dividend Play a year ago that
    I hit $5M a month once...just once...and they upgraded me. After that, I probably didnt hit $5M but
    I think becoz I was still trading very regularly and much much more than their average client, they
    decided to let me enjoy Premium Status. The slightly lower com...0.01% lesser is not much lower but
    still, it translates into more eggs when I let go of my chickens. I appreciate that.

    Those of you who are scared about having a CFD account...I understand how you feel. Becoz
    I was damn scared too. In fact, so scared that I didnt even want to find out what it is and how
    it works. We humans are creatures of habit. We like the status quo. We dont like change. Change
    means uncertainty. Uncertainty means anxiety, doubt and with that...stress creeps in. And nobody
    likes stress. We all hate it.

    To me, to venture into CFD means to venture into something new. And to learn something new means
    I have to leave my comfort zone...get out of my comfortable sofa which I am very familiar with... and go
    out into the unknown to sit on a hard stool without a backrest in the hot sun and bake and sweat there.
    My fear of the unknown and my unwillingness to step out of my comfort zone stopped me from getting
    to know a trading instrument which as it turns out, became a turning point in my learning journey in this
    stock trading game. And becoz of that, I have achieved success in ways never seen in the earlier part of
    my learning journey when I traded via an online cash account.

    So to those of you who are still scared, I say to you... Fear no more. On the contrary, fear not that you
    are about to venture into CFD. Fear only if CFD is abolished as a trading vehicle and withdrawn from the
    market. THAT... for me, will be a life-changing event. A very, very sad event. Becoz I cannot imagine going
    back to online cash account to trade. Alot of the things I do now, I WILL NOT be able to do with an online
    cash account. My estimate is that 80% to 90% of my trades... are becoz I have a CFD account. If online
    cash account is all I have to trade, only 10% to 20% of my trades can be done. Why? Becoz:

    1. SHORTing is out.

    2. Buffering an existing position is out. This means doing a trade in the opposite direction
    to an existing position.

    3. Chicken trading...where I run with 1 to 3 bids is out. Becoz with an online trading account,
    I will need 2 to 5 bids just to breakeven for the smaller counters and 10 to 12 bids for the
    heavyweights. I dont trade pennies where 1 bid you can run even with a cash account.

    Now you know why 80% to 90% of my trades cannot be done with a cash account.

    Different brokerages charge different rates for their com. I will use Lim & Tan's rates for my illustration here.

    Up to 50K - 0.28%
    >50K-100K - 0.22%
    >100K - 0.18%

    On top of com, there are other charges:

    SGX Trading fees - 0.0075% of contract value
    CDP Clearing fees - 0.0325% of contract value
    GST at 7% of all 3 fees above.

    A convenient formula I used to use is com + Trading fees + Clearing fees + GST = XXXX%

    For trades up to 50K, the formula is 0.28 + 0.0075 + 0.0325 +7% = 0.3424%

    To work out quickly how many bids you need to run, take....

    Share Price x 1000 Shares x 2 (to BUY and to SELL) x 0.3424%

    For eg.......... BUY 1000 of SingTel at 4.33... how many bids you need to run?

    4.33 x 1000 x 2 x 0.3424% = $29.65

    Every 1000 shares... 1 cent gives you $10.00. For SingTel, 1 bid is 1 cent.
    For cash account, your com etc is $29.65 for every 1000 shares traded.
    To breakeven, you need 3 bids to run. 3 bids means 3 cts or $30.00 to cover your com of $29.65.

    Now we compare with IG CFD account. There is no trading fee or clearing fee and GST is
    already included in the 0.09% com. My costs per trade is...

    4.33 x 1000 x 2 x 0.09% = $7.794 per every 1000 shares traded.

    To recap...

    Cash Account - com is $29.65 per every 1000 shares traded.
    IG CFD - com is $7.794 per every 1000 shares traded.

    When a cash account trader buys 10000 shares in SingTel at 4.33 and sells intraday at 4.36, he makes 25 cts nett.
    For me using CFD at 0.09% com all inclusive, for that same trade, I will make $221.79 nett.

    This is for intraday trade where I pay only the com when I BUY and SELL.
    There are no finance charges.
    But if I hold this position overnite, in addition to the com, there are finance charges.
    For LONG positions, the interest is SIBOR + 0.25%.
    For SHORT positions, the interest is SIBOR minus 0.25%. There is also a borrowing costs for SHORT positions
    becoz the CFD House has to borrow scrips and incur a costs in order to enable you to SHORT a stock. I do not
    have the formula to calculate borrowing costs. From my trading experience, as long as you close your position
    within say one week, the finance charges wont be much. The longer you hold a position, the higher the finance
    charges. Recently I had 30 lots of SHORTs in SIA which I held on for about 6 months. My com + finance charges
    amounted to more than $5.5K. Roughly, it was about $30 per day for those 30 lots of SHORTs. This is just a very
    rough estimate for illustration purposes.

    The ability to run with 1 bid when need to, for eg. when the market suddenly turn negative or
    when the market suddenly quieten down and sellers start to come out, is a VERY VERY important
    trading edge and one which makes all the difference between winning and losing.

    Using the same example above, a cash account trader who buys 10,000 shares of SingTel at 4.33
    and sells at 4.34 will lose $196.86 whereas a CFD trader will in that same trade make $21.97.

    Very often, a market will go into a range trading mode which can last for weeks. Initially, the range
    will be wider. But as the consolidation drags on, the price spread between the intraday high and low
    becomes narrower and narrower.

    For a cash account trader, as he needs more bids to breakeven, the range may be too small for him
    to risk a trade. Even if his trade is successful, the reward may not justify the risk. So he wont place
    the trade at all.

    But the CFD trader who can run with 1 bid, if need be, and can collect Buffet Vouchers, Petrol
    Vouchers, PUB Vouchers, Grocery Vouchers etc during range trading kept busy and
    will spend more time in the market than on the sidelines.
    Last edited: Oct 26, 2015
  9. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    This is for CFD traders with IG.

    I have said many times that for a CFD trader, it doesnt matter which way a stock moves,
    so long as it moves. Coz we can play and profit from both sides of the market. Even if you
    already have an existing position but the stock is moving in the opposite direction. However,
    whilst you want to play in the opposite direction, you may still wish to keep your existing
    position and wait for the stock to come back to your price. How then to open a new position
    in the opposite direction without closing your existing position?

    There are 2 ways to do this.

    The first is to click on OTC on your Deal Ticket. Here's how a Deal Ticket looks like.
    You can find OTC at the top right hand corner.


    After you click on OTC, the Deal Ticket will change to look like this.

    All you need to do is to key in how many lots you wish to trade by typing the number
    of shares in the box next to "Size". You dont need to key in the price. You cant. The
    price will be realtime and will appear in the RED and BLUE box. To BUY or SELL, you
    click directly on the BLUE or RED box accordingly. BUT WAIT. Before you click BUY or
    SELL, you MUST click on the small box next to the words "Force Open". Failure to click
    on the Force Open box will close your existing position if your next trade is in the opposite
    direction. However, should you forget to click the Force Open box and accidentally close
    your existing position, call IG immediately to rectify your error. IG will assist you to reinstate
    your existing position and help you open a new position in the opposite direction.

    The second way to avoid closing your existing position is to go to your OPEN POSITION (OP)
    Folder and click on the counter you wish to keep. DO NOT CLICK ON THAT COUNTER FROM
    YOUR WATCHLIST (WL). After you click on your counter, a Deal Ticket will appear. Key in a
    price you are comfortable with to close that position. After you click on CONFIRM, check your
    WORKING ORDERS (WO) Folder to ensure it is there. Once that is done, you have "LOCKED"
    that existing position and the only way for that existing position to close is if your order to
    close that position is filled. Having "LOCKED" that existing position, you can now safely use
    DMA or OTC (without clicking on the Force Open box) to open a new position in the opposite

    From then on, each time you open a new position, you must likewise "LOCK" that position.
    Otherwise, you may accidentally close that position when you open yet another new position.

    To summarise...

    1. Always lock an exisitng position by clicking on it at the OP Folder to key in a closing price.
    2. To open a new position, always click on that counter in your WL. Once that new position is
    filled, lock it immediately.
    3. The advantage of "LOCKING" your existing positions is that when you open a new one, you
    can use both DMA or OTC. But if you do not LOCK your existing positions, you can open a new
    position in the opposite direction only by OTC and you must click the Force Open box.
  10. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    The 20-dma Snap Back Play...

    Here are examples of how the 20-dma Snap Back Theory really works when it works.














    1. When a stock goes into a 20-DMA Snap Back Play, the price will stay near the 20-dma and rise over a time
    frame be it weeks or months.

    2. Whenever the price dips below the 20-dma, it wont stay there for long. Before long, it will rise again and go
    above her 20-dma. What this means is that each time the price dips below the 20-dma, that is an opportunity
    to buy. My recommendation is to wait for the price to U-turn first. Then BUY.

    3. Whenever the price rises too far away from the 20-dma, it will come under profit taking and that's when it
    will pullback towards its 20-dma. Hence, the "snap back" action towards its 20-dma.

    4. Sometimes, the price pullback all the way to its 20-dma and then goes back up. Sometimes it goes below
    its 20-dma. Sometimes traders jump queue to reload and this cause the price to u-turn back up even before
    reaching the 20-dma.

    5. The combined effect of all of the above will produce a beautiful chart showing the stock on a steady uptrend
    for the duration when the 20-DMA Play was on. For some stock, this 20-DMA Play lasted 6 months to a year.
    There are stocks out there which are doing this. We just have to find them. And profit from them.
  11. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    Why The Price Can Rise When The Monkey Is Selling (Distribution) &
    Why The Price Can Fall When The Monkey Is Buying (Shortcovering)

    Many moons ago, tatapao said this...

    "It is a common misconception to believe that the price will not move up during distribution."

    Monkeys do push prices up to enable them to sell.
    How does a department store which is doing not too well attract hordes of shoppers overnite?
    By throwing a 20% Discount Storewide Sale.
    When it comes to other merchandise, more people will buy only when prices are lower.
    But the stock market is special. It is the only place on Earth where more people will buy only
    when prices start to move and rise higher and higher. Yes. When it comes to stocks, if the
    price is not moving, people dont want to buy. But if the price starts to rise, more people will
    CHEONG in to buy.

    So monkeys capitalise on this phenomenon.
    When they want to sell, they need buyers to sell to.
    How to bring out more buyers?
    By pushing the price up.

    Likewise when a monkey has collected SHORTs.
    To cover low, he needs sellers.
    How to bring out more sellers?
    By depressing the price down to create panic and fear.
  12. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:

    I constantly remind myself.

    You dont have to trade everyday. Trade only when it is easy to make money.
    So we will just have to patiently wait for a SET UP to happen.
    If we study our chosen target and get to know her well and also get to know
    our neighbours well, we will know what kind of SET UP we must see in the price
    action before conditions become more favourable to do a LONG or SHORT. So
    that is what we must do - patiently wait for the SET UP to occur. Then make
    a trade. And not jump in first to make a trade due to "dont want to wait anymore".
    Becoz when you do that, you are forcing a trade...when conditions are not ideal
    to make that trade. And this kind of forced trade ... is at best a 50 : 50 trade.
    Which is like what General Sun Tzu said...

    "A losing army goes into battle first. Then seek to win the battle.
    A winning army realises the conditions necessary to win and wait
    for them to be present first. Then go into battle."
  13. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    A damn good practical explanation of why Elliot Waves move the way they move...


    In the first wave up of a bull market (talking larger wave degrees here -- daily, etc.), the majority are convinced it's not the start of anything -- they figure it's a counter-trend rally to the prior down trend and soon to collapse to new lows.

    In the second wave down (which corrects the first wave), the majority believe the collapse has begun. They continue to believe this even after the third wave up begins -- at first, they figure the third wave is "another" counter-trend rally.

    So they short the third wave just when they should be buying. It keeps powering higher, and their stops provide additional rally fuel. Somewhere around the middle of the third wave, we hit "the point of recognition" for the masses, and they realize the trend is here to stay for a while. There's a sudden "herd mentality" rush to jump on board, and that gives further fuel to the third wave. These are some of the reasons third waves are usually the longest and most powerful wave.

    After what seems like forever, the fourth wave correction comes along and confuses the heck out of everyone. It knocks out the trend followers. They jump back in. It knocks them out again. The permabears are convinced it's the start of a new collapse. But the majority do not believe it's anything other than a correction -- and they're right. During fourth waves, counter to "contrarian" philosophy, the majority sentiment is usually correct. The job of a fourth wave is NOT to strike mortal terror into the masses (like the second wave did), it's to try and screw everyone up and make trading hard again (and fourth waves serve another purpose, which we'll discuss momentarily).

    Eventually, the fourth wave finally ends. Wait, no, sorry -- just got the memo here, it's not over. Maybe it's a triangle? Ah, an expanded flat! Okay we can move on to the next paragraph now. (Sorry -- just a little fourth wave humor there, for the Elliotticians in our audience.)

    Finally the fourth wave ends and... wait, that was only wave A of the expanded flat! Hang on...

    Okay, whew, eventually the fourth wave ends (really!) and the market enters the fifth and final wave up. By now, bulls are fat and happy. Nothing can go wrong! See, we're at new highs again, just like we told you idiot bears! All dips should be bought going forward, forever and ever, amen.

    Complacency reigns.

    Bears, on the other hand, are sick of it. They thought for sure that last fourth wave was the start of the end. They're done. No more shorting! Ever. It's a proven historical fact that more bears join monasteries during high-degree fifth waves than during any other wave.

    And this is one of the other jobs of fourth waves in a bull market: They condition traders to buy the dips. By the time the big fifth wave rolls around, traders have become deeply conditioned by all the fourth waves that have unraveled at lower degrees over the recent months (or years) and which have culminated with new highs each and every time.

    Think of where we are now -- every time bears think something is getting going on the downside, the market recovers. Fourth wave at subminuette degree -- new highs! Fourth wave at minuette degree -- new highs! Fourth wave at minute degree -- new highs!!! Etc. There's been no end to the new highs.

    See, all of this is necessary to ultimately create the psychology we encountered back in waves one and two. Once the trend finally does change, no one will believe it anymore -- not even the handful of remaining bears. Everyone will think it's another fourth wave "correction" -- right up until that big third wave down hits and wipes everyone out.

    And then we rinse and repeat all of the above, but heading down instead of up (for a bear market or major bull correction).

    This is a glimpse into what creates the patterns and fractals that make up Elliott Wave Theory. It's not some crazy esoteric voodoo; it's simply a reflection of human nature.
  14. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    What Are Tenant Stocks & Tidal Stocks?

    At any phase of the market, there are stocks which rise half cent to 2 cts every day or every other day.
    And before you know it, after 1 week or 2 weeks, that stock has risen 5 cts to 20 cts. Every 100 lots
    you park into such a Tenant Stock will earn you a rental income of $5K to $20K. Such usually
    collect rental intra-week or intra-fortnight or intra-month.

    Likewise if a stock is doing the slowly bleed to death thingy and is falling half cent to 2 cts every day or
    every other day. After a week or two, she would have fallen 5 cts to 20 cts. If you SHORT such a stock,
    you can also collect rental after one week or two or after a mth.

    These tenant stocks tend to be for short term play... 1 week, 2 weeks or 1 month. And so long as they
    continue to behave that way, you can keep treating them as your "tenant".

    Tidal Stocks are those which tend to have a larger move between their HIGHs and LOWs. The 3 banks,
    SIA, SGX, SingTel are a few examples. For Tidal Stocks, you need to look at their charts and plot the
    Summit at the TOP and the Valley at the Bottom. Calculate how much (in terms of dollars or cents) is
    each move and divide it by 4 equal parts. Lets say for illustration... one move is $2.00. Dividing it by
    4 equal parts means 50 cts per part. And if that 2-dollar move is from say $20.00 to $22.00, the 1st
    quarter of that move is from $20.00 to $20.50. The 2nd quarter from $20.51 to $21.00. 3rd quarter
    from $21.01 to $21.50. And last quarter from $21.51 to $22.00.

    PATIENCE is the key. The BEST BUY is at the 1st quarter followed by the 2nd Quarter. If the stock is
    already at the 3rd Quarter when you look at it, still can LONG if the bullish upward momentum is still
    there. HOLDING POWER is a MUST. And the ability to add (if your first entry is wrong) on dips is an
    important advantage. Tidal Stocks are mostly also Sure CUM stocks, ie. Never Fail To Come Back stocks.
    But not all Sure CUM stocks are index stocks. Likewise, not all index stocks are Sure Cum stocks.

    To SHORT, it is the reverse. The BEST SHORTs are found in the 4th quarter, ie. $21.51 to $22.00.
  15. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    Build Up Your Trading Capital To Increase Your Chances Of Winning This Game

    I have said this before. And I say it again.

    And again.

    And again.

    That it is true that this stock market game is one game where............the more money you have,
    the better your chances of winning this game.
    And if you have lots and lots of money....and you do
    it properly, ie. play only SURE CUM stocks, you WONT LOSE. YOU WILL WIN. YES YOU WILL.

    I give you one real life example of my trade.

    I LONG CapMallsAsia at $1.9994 x 160 lots.
    She fell to 1.85.
    I was sitting on a paper loss of $23,904 + com and finance charges.
    She then rebounded to 1.975 before pulling back to close at 1.945 on Fri.
    When she found bottom and started to rebound...first to 1.875...and then crossed 1.90,
    if I have lots of money to play this game, I would have found the balls to add another
    160 lots at say 1.885. This thing about whether got balls or not hor, there is a direct
    co-relation between the size of your trading capital and the size of your balls. Its as
    simple as that. And if I have alot more trading capital to spare, finding the balls to add
    another 160 lots at 1.885 would be a piece of cake. And that would have brought my
    average price down to $1.9422. Then when the price rebounded to $1.975, I would have
    been able to get out (if I want to) with a profit of $10,496 before com and finance charges.

    But I didnt do that. I was not able to becoz of limited trading capital. But another trader who
    has the same position in CMA as I and who had more money to play, will be out of CMA now
    with a tidy profit in his trading account. And becoz he has more capital than I, he can keep
    doing this, and outperform me in every trade. And each time he completes one successful
    trade, his trading capital grows and an exponential rate. And with more money
    to play, he can take on bigger positions and repeat the same thing with more counters and
    each time he successfully completes each trade, his trading capital grows by leaps and bound.

    Which explains why it took Prof JohnPaul's friend about 20 years to make his 1st million but
    after he got that 1st million, he made another 8 million over the next 2 years. This is the sheer
    power of the exponential effect. To make money, you need money. And the more money you
    have, the more money you can make. Which is why a Fund Manager who has hundreds of
    millions, if not a billion or two to play... will not lose if he invest in blue chips index stocks.

    My advice to those of you who have not much capital is....BE PATIENT.

    Work within your available trading capital.
    Trade only Sure CUM stocks.
    Read charts to know how not to buy at the HIGH or to short at the LOW.
    Tailor your trade size to match your trading capital so that if wrong, you still have
    enough trading capital to do your averaging down when your counter has rebounded.

    One common mistake made by newbies is.... Ka Ka HOOT on a contra basis.

    Becoz THE ONLY WAY to make alot of money with little or no capital and
    within a very short time. But do you know that the Monkey knows that too? And he
    makes use of T + 5 all the time to trap contras to give up and throw their scrips to
    him at a loss. Ask yourself this - how come it happened so very often that when you
    LONG a penny counter, the price either stops rising or starts to fall. Then when your
    contra clock rings, you Boh Pian throw back and took your loss. But right after you
    threw back on the same day or on the next day, the price rebounded! And this happened
    again and again !!! Cannot be pure coincidence bah? Becoz it isn't. It was planned! It
    did not happen by chance. It happened becoz the Monkey arranged for it to happen.

    So when contras are selling becoz they run out of time, the Monkey is happily collecting

    cheap from contras to position himself for the next push. And when the next push comes,
    those contras who lost money Bay Kam Guan...will rush in to LONG again "to take revenge".
    Those who rushed in early at the beginning of a push will have a chance to get out with
    profits. But those who hesitated and LOON dont buy becoz they had just cut loss and are
    licking their wounds...if they LOON and LOON until Bay LOON leow then they finally jump
    in again coz they see the price rising day after day, then they will kena caught again when
    contra clock rings a second time.

    It is a fact that Monkeys use T + 5 to suck blood out of retail players. Know that, and use
    this info to plan your next trade when you try to ride on the Monkey's coat-tail.
  16. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    How To Set Trailing Stop Profit Loss In IG Markets CFD Trading Platform

  17. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    You Dont Have To Cut Loss If You Play Sure CUM Back Stocks

    I know having a tight stop loss is generally a good thing.
    But then... cutting loss... is also the reason why we sustain a loss.
    A paper loss.... as long as it remains on paper only.... is not a loss until you take it.
    Ofcoz I am not saying just die die LOON any paper loss. NO. Not ANY paper loss.
    But only paper loss for Sure CUM stocks.

    Take CapMallsAsia.
    My average price is $1.9994.
    She fell to 1.85. That's almost 15 bids.
    Then bounced back to 1.955 today.
    So my paper loss of 15 bids is today reduced to 5 bids.
    And my paper loss based on a drop of 15 today reduced to one-third of the original paper loss.
    CapMallsAsia is an index stock and a Sure CUM stock. When she goes back to $2.00, my paper loss will
    be completely wiped out. And if she continues to rise to just $2.02...I will harvest about 3000 eggs nett.

    Sis adonis has a way to describe my trading style....

    She said I play big and make big.
    I said...But when I lose I also lose big.
    She then replied... "You where got lose big? Lose also you LOON until win."

    You get the point?

    Having a tight cut loss is good for counters which you must cut loss.
    But not if you play Sure CUM stocks and you did not buy at the HIGH.
    The problem with cutting loss is...

    1. When stopped out, you cut. And if you have a string of this....damn SIAN one. Damn demoralising.
    2. Small losses...when you have a string of it....will add up to quite a sum and its no fun seeing your capital being siphoned off by losses.

    Just sharing.
    I also dont like to cut loss.
    Who does?
    So I told myself.... dont want to cut loss then play only Sure CUM stocks.

    When I am out of CapMallsAsia, I will let you know how much paper losses I was sitting on.
    Its 5-figure hor, fren.
  18. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    How To Survive A Selldown, Retracement Or Correction?

    As long as you are ....

    1. Holding a stock which is a Never Fail To Come Back Stock.
    2. You have holding or CFD.
    3. You have LOONing power. This requires great mental strength at times.
    4. You have additional capital to average down when the market rebound.

    You wont die one.

    Dai Lole John and Jie Jie Adonis will put up both hands and legs to confirm what I just said.

    Recently, I was asked to talk to a young man to teach him about trading/investment.
    I told him that the stock market game is one game where it is true that the more money you have, the better your chances of winning the game.
    And I used this one very simple illustration to make my point.
    I said....
    Say I am a Fund Manager. And I have hundreds of millions if not a billion to invest in the market.
    Meaning I can hold my positions for as long as I need to. Plus I can add stocks when prices are attractive.
    I continued...
    Say I am a lazy Fund Manager and I didnt do my homework.......and I bought 1000 lots of UOB at the HIGH at $22.10.
    UOB then started to drop. But I am a Fund Manager. I can hold.
    Say...UOB continues to drop and drop and drop and eventually bottomed out at $19.00. And then it rebounded to $19.50.
    I am a Fund Manager. Money is no issue. At $19.50...I buy another 3000 lots of UOB.
    So my average now is $20.15 x 4000 lots.
    UOB pays 60 cts of dividends per year.
    Let's say it takes one year for UOB to recover back to $22.00.
    Meantime, I will collect dividends which at 60 cts per share.... is $2.4M.
    And UOB WILL one day recover to $22.00.
    And when it does, my 4000 lots at $20.15 would have made $7.4M.

    So isn't it true that as long as you are holding a Never Fail To Come Back Stock,
    You can HOLD.
    You can LOON.
    And you can average down when the stock has bottomed out....
    You cant lose?


    So now you all know why I dont play pennys.
    Becoz when a penny drops, it can drop dead and remain dead forever never to rise again.
    Last edited: Oct 18, 2016
  19. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    The Importance of Buffer When Trading With A CFD Account

    Yes. To trade via CFD, you MUST ALWAYS provide a buffer. One simple solution to this problem is to treat your CFD account exactly like a Cash Account. So let's say I have $100K of trading capital in my CFD Account and I am LONGing an index stock which requires 10% margin, I should buy not more than $100K worth of that stock. Let's say the stock is trading at $1.00 and I buy 100 lots, that's $100K worth of stocks and I do have $100K of trading capital. But what my CFD House will do is to set aside 10% of the value of the stock, ie. $10K as margin. This $10K margin will be deducted from my trading capital of $100K leaving me an " Available Balance" of $90K to trade in other stocks. Assuming my stock price falls to 90 cts, I would be sitting on a paper loss of 10 cts x 100 lots = $10K. My CFD House will set aside another $10K from my trading capital to buffer that $10K paper loss. At this juncture, my platform will show:

    Capital : $100,000

    Margin : $10,000

    Profit & Loss: -$10,000

    Available Balance : $80,000.

    If I have only $10,000 of trading capital and I buy 100 lots x $1.00 worth of stocks, my entire $10,000 of trading capital will be set aside as margin for that position leaving zero dollar to buffer any possible paper loss. In such a situation, if the price of my stock falls to say 95 cts, my paper loss is 5 cts x 100 lots = $5,000. And since I have no more trading capital to buffer that paper loss of $5,000, my CFD House has the right to give me a Margin Call to top up my account by $5,000 by a specified date/time in default they will be entitled to close my losing position at the prevailing market price. Let's say they force close my position at 95 cts, I would have lost 5 cts x 100 lots = $5000 plus com + finance charges (if any). And my Available Balance which was $10K will be updated to show a reduced balance of say $4750 ( after deducting the loss of 5 cts x 100 lots + com + finance charges). And after my House has closed my position at 95 cts (which they are legally entitled to if I do not meet their Margin Call), it matters not anymore if the price of my stock rebound strongly the next day or even on that same day to close at $ 10 cts above my entry price. My stock having been force sold, what happens to the price thereafter is hindsight and irrelevant.

    To avoid the above situation, you must ALWAYS set aside capital to buffer any temporary paper loss. You musn't use up all your trading capital as margin. Having enough capital to buffer a temporary paper loss will make all the difference to your trading outcome. Earlier this month, prior to Super Group releasing her Results, I LONG her at an average price of $4.2154 x 55 lots. At one point in time, she fell to $4.00. My paper loss was $11,847. But I had enough capital to buffer that paper loss. So as far as my CFD House was concerned, this was a non-event. Super Group then rebounded to 4.45 and I started to sell her slowly (I could not sell all 55 lots at one go without crashing the price) at 4.42, 4.40, 4.39, 4.38, 4.37 and 4.36. It took quite a while to slowly unload 55 lots and I did that one day before she announced her Results. After selling all 55 lots, my profits worked out to more than $8K nett after deducting com and finance charges. Why am I telling you all this? To highlight to you all that this trade was at one time sitting on a paper loss of $11,847 + com + finance charges and that paper loss would have become a real loss if I did not have enough capital to buffer it and I kena force selling by my House. But becoz I had enough capital to buffer that paper loss, it remained only a paper loss. No more and no less. And that trade soon turned around from a possible loss of $11,847 + com + finance charges to one of real profits of more than $8K nett. In an earlier trade the week before, I made more than $4K nett from Super Group. All in, I made more than $12K from her for this round of Result Play. That earlier trade of $4K profit was also at one time sitting on a paper loss of $8400 when she fell to $3.90. Thankfully, she rebounded and that paper loss of $8400 simply vapourised and I sold her for a profit of more than $4K.

    The moral of the story? When you trade via CFD, never trade to the max of your capital. Always keep some money to act as a buffer for paper loss. Hopefully, your paper loss is temporary and LOONable and for that, it is all about timing your entry correctly at or near the Bottom. If you anyhow BUY or SHORT without checking where your stock is and only after you have entered that you realised you SHORT at the LOW or you LONG at the HIGH, then LOONing your paper loss is the worst thing you can do to yourself. In such an instance, no choice. CUT. And then open a new position in the opposite direction to recoup your loss.
  20. nottibird

    nottibird Moderator

    Oct 25, 2012
    Likes Received:
    Direct Market Access Model & Market Maker Model

    Direct Market Access means when you key in a BUY or SELL order, your actions affect the queues in the Order Books of The Exchange.

    Say CMA now shows 233 buyers at 2.02 : 2.03 has 300 sellers.
    If I use DMA to queue to BUY 200 lots at 2.02, you will see the BUY queue at 2.02 jump to show 433 buyers.
    Same same if I key in a SELL.

    If I sell by throwing 200 lots to the buyers at 2.02, you will see the buyers in the queue reduced by 200.

    That's what DMA means. Every action you make, BUY or SELL affects the Order Books of The Exchange.
    DMA also mean you can participate in Pre-Opening and Pre-Closing which is VERY important.

    Your IG Platform is by default set to Market Maker Model.
    To have DMA, you must enable your account by enabling Data Access and that's when they will levy you
    a charge of $60. But if you do 4 trades within that month, you get a full refund of the charge.

    Market Maker Model, which is the default setting means you CANNOT queue and cannot participate in
    Pre-Opening and Pre-Closing. And the most salient feature of Market Maker Model is when you want to
    BUY, you MUST buy at the current SELL price. And when you want to SELL, you MUST sell at the current
    BUY price.

    Say CMA is now trading at 2.02 : 2.03.

    If I want to sell 20 lots, the price will be 2.02. There is no queueing.
    If I want to buy 20 lots, the price will be 2.03. No queueing too.
    I cannot buy at 2.02 or sell at 2.03. Not with the Market Maker Model.
    And whether I buy or sell, my action DOES NOT affect the Order Books of The Exchange.
    Becoz when I buy or sell, I am trading against the House. The House becomes macam like a bookie lidat to collect my bet.
    If I win, the House pays me. If I lose, the House Chiak me.
    Last edited: Aug 27, 2014

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