My CFD Journey: Up 10,000 USD During Opening Trade of Dax

During the opening of Dax today at 09:00 CET I tried to enter a buy position which would have turned in some crazy profits. Unfortunately, the trading platform that I use did not allow me to open any trades due to a very volatile price at that point. I could have entered a “fill the position” which would have executed the trade at any price but I wasn’t comfortable doing that. So I waited a while and monitored the price development. The price spiked up and I felt more and more nervous entering a buy position. I entered two different short calls when I thought the price would slow down, but both got maxed out and I ended up with $24 000+ in loss. I have a rule that says I can trade up to three times per day by doubling what I lost. I still felt comfortable that the price would not be sustained at 13,296 so I entered a new short call when both RSI and Stoch signaled Dax was overbought. That trade went very well and I made more than 26,000+ USD on that trade alone. Then I did some smaller trades where I was quick in and out, and all turned in a nice profit. I’m up 10,000 USD today in total:

User Comments

CFD is Contract for Difference. Investopedia has a nice introduction to it here. Basically you are betting on a price rise or a price loss. And you can “gear” your investment: You can invest 1000 USD and be able to trade for 10x or even 500x your original amount. You have to pay a “spread” which is the difference between the sales price and buy price of the asset you are trading. In my case, Dax have 1 in spread during opening hours.

I use IG.com to trade CFDs. I’ve tried multiple trading platforms and this is the one I enjoy the most. When that is said, trading CFD is very risky, and you must have a large enough bank roll to ensure that you are not “drawn out” in one trade, AND you may lose more money than you have deposited to the trading platform if you are not strict about setting stop losses. I’ve lost more money than I’ve made with CFD so far (past years). But I’m trying to find a sound strategy and become better at it.

My results so far

Order Entry Price Take Profit Stop Loss USD Bank Roll USD % Change
Start 258 064,52
Day 1 25.01.2018 Dax Buy 13268 13274 13262 6 472,52 264 537,03 2,51
Day 2 26.01.2018 Dax Sell 13342 13318 13392 7 642,84 272 179,87 5,47
Day 3 29.01.2018 Dax Buy 13331 13336 13313 12 508,39 284 688,26 10,32
Day 4 30.01.2018 Dax Buy 13226 13233 13176 6 625,94 291 314,19 12,88
Day 5 31.01.2018 Dax Buy 13217 13230 13187 26 474,06 317 788,26 23,14
Day 6 01.02.2018 Dax Sell 13291 13265 13327 10 834,58 328 622,84 27,34

My trading rules

  1. Only risk max 2% of my bank roll per trade.
  2. Have 0 active positions during the night (first of all, I lose sleep, second; you are charged an interest fee for leaving a leveraged product overnight.)
  3. Always trade on last month’s trend including the previous day(s). If they do not correlate, I will not trade.
  4. If one position is lost, I’ll double the amount (martingale) and do a second trade. I’ll only stop doubling after 3 consecutive losses.
  5. Do not think about lost trade opportunities.
  6. Markets to trade: Dax & Dow (minimum spread).
  7. Stay updated on economic releases prior to entering a trade.
  8. Do not have emotional ties to the money. I like to call them “points”.
  9. Only enter a position when an asset is overbought or oversold shown by both RSI & Stoch at the same time.
  10. Always write down your trades and elaborate what went right or wrong.
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