CFD Trader – One-off review
Graham asked me to look at CFD Trader; a £47 per month subscription signal service, and training program.
First some gobbledegook:
A CFD is effectively a bet on the price movement of financial derivates such as stock prices. It is mainly a UK-based facility that the spread betting companies use to allow you to wager whether stocks, ForEx etc prices will go up or down. The difference to a conventional broker is that you never actually buy or sell the derivative in question. If this explanation has confuses you either google “CFD” or ignore it, it’s not important!
As we are trading CFDs the suggestion is that this method is not open to jurisdictions where spread betting is not legal. I am not sure that that is true, as you could use a conventional broker to actually buy and sell the instruments in question. However there are differences in calculating lot sizes etc that CFD Trader does not cover as they do not trade this way.
CFD Trader is looking at stocks and shares rather than ForEx or commodities.
Sorry, I can see your eyes glazing over from here! Summary: CFD Trading is spread betting on shares.
There are two ways to look at CFD Trader. You could look at them as a signal service. At the beginning of each week you will receive a stock with trading parameters such as entry price, stoploss and 2 profit targets. There are some well-constructed tutorials about how to set all this up, so don’t worry if you don’t know how to do this. The trades are managed as the stock prices move.
This is nice and simple, and will take 10 minutes or less on a Monday morning (for Europe) and you are done for the week.
Looking at the trade results posted in the member’s area, only results for 2010 have been published. This shows an increase in a $10,000 account to just above $17,300. Now an increase of over 70% tax-free for 10 minutes work per week is massively better than you will achieve by leaving this money in a savings account. However, as this is a form of gambling you have to acknowledge that there is a level of risk involved.
If you can afford to leave the bank to grow, after a few years a 70% return will provide a nice tax-free income, so it is certainly something to look at.
You can start with as little as £100, but it will take a long-time to grow such a small bank to a significant one.
I said that there are two ways of looking at this service and the second way is to examine their training material. The method used is not new or revolutionary. But the training videos are well constructed and explain this particular trading method. The methodology could be used to trade currencies and commodities to find more trades than 1 per week, and you could come down to lower timeframes (I would not recommend less than daily charts) too. This will involve more work on your part, but the trading methodology is sound so you should increase your profits. However, I strongly recommend that if you do go off on your own you paper-trade and use very small stakes for a good few months so you have confidence that you are trading correctly before launching at tens of pounds per pip.
Because the signal service is 1 trade per week this service is not a candidate for cash-master trialling. Assuming the profit statements to be accurate, this looks like a safe way of investing some cash, or building a bank if you have a few years. On that basis I am happy to approve this.
Alternatively, there is some decent training material that will give you a good start in to learning how to swing trade although this comes at a price!
You can try CFD Trader here: