Trading Index CFD with TRUMarkets

Click here for basic prerequisite Index CFD knowledge.

TRUMarkets offers trade suggestions on Index CFDs providing an entry, stop loss and exit level via SMS and email.

The following is a typical trade suggestion that you would receive as a Subscriber to TRUMarkets:

Position Trade Example

Entry:

On the 28th January at 2.45 p.m., the SPI was quoted at 3475/3476 and our Index Analyst from our trading desk attained a “Entry” signal.

An SMS text message and email was sent out our TRUMarkets’ subscribers as per the following:

"TRUMarkets: Entry signal-short term-Sell ASX200 3476/Target 3380/Stop Loss 3530".

As per the prices above on the 28th January, at 2.45 p.m., the SPI was quoted at 3475/3477.

• On our web site, Members of TRUMarkets would be able to login and attain a succinct fundamental and technical summary behind the reasons for the Index CFD trade suggestion along with a supporting chart. See charts below
  
• The subscriber can choose to trade the suggestion as per our recommendation and would either log in to their platform or call their CFD Provider to action the trade.

5 mins chart

30 minis chart

Reason for Trade suggestion

• In light of the market downtrend at present and indicative early weakness in the US overnight futures, we are looking for levels to sell today or shorting the SPI.

• Sell on a break beneath the horizontal support lows on the SPI futures contract, which is at 3475.
  

• We are looking at a medium-term target back to 3380, which can be seen on the 30 mins chart.

Exit

On the 4th February, the SPI price subsequently fell to our profit taking target and the position was closed  @ 3380, delivering a gain of 96 points.

TRUMarkets CFD Index trade email/SMS read:

"TRUMarkets: Exit signal- Profit target of 3380 achieved"

Profit Calculations:

CFD Providers provide different leverage levels in relation to Index CFDs, though the majority of them deliver 100 X leverage on your investment.

Based upon 100 X leverage and the trader trading 20 lots, the trader would have invested 20 X 3475/100 = $695 in the trade.

Given the high leverage provided on CFD Index trades by CFD providers, TRUMarkets encourages good money management and trade size disciplines. i.e. controlled stop-loss exit points coupled with a sensible number of lots traded that won't break the trading bank.

To assist the trader, TRUMarkets encourages subscribers to make us of the TRUMarkets Position Size and Margin Calculator by clicking here.

Essential Knowledge for Beginners

• The index CFDs are offered by CFD Providers, which are normally priced off the corresponding futures contract of the main index of the particular country. For instance, the benchmark of the Australian index CFD contract is the Share Price Index Futures (SPI). Each point movement in SPI usually translates to the same amount of movement in the corresponding CFD provider's equivalent index. They all have their own equivalent index because it is far too expensive to use the SPI itself.
  
• Leverage is attained may vary from CFD provider to CFD provider, though typically deposits of between 0.5% – 1% (leverage of 100 x to 200 times) are taken on the main world indices CFDs.
• As the degree of leverage you undertake will vary depending upon your own circumstances (risk profile and capital available to trade), we will provide a general guide as to trade size to assist Members in generating their own capital management plans.
• The various providers will normally provide a base figure at the commencement of each trading day and this value will vary slightly each day depending upon how many dividends were paid by the major companies.
• Like the with the Aussie market in which the main CFD traded index is priced off the SPI, in other countries such as the UK and US, their prices are similarly priced off the Dow Futures and FTSE Futures.
• You will need to check what the equivalent price level of the particular index CFD is trading at with your CFD provider before you enter the trade as we will be quoting our trades based upon the futures contract.  

Types of Index CFD trades TRUMarkets suggests:

1. Short-term Trades: The trade will generally have a tight stop loss and will be closed during the same session that the trade is opened. 
2. Medium-term Trades: The trade is expected to be held for a period of 1 - 3 days and will have the widest stop level amongst all the trade types and a very small position size is recommended.  
3. Position Trades: The trade is expected to be held for anywhere from 3 - 5 days and will be traded with a wider stop loss level and a smaller position size is recommended.