Forex CFD Trader

You already know how tough it is to trade Forex profitably. There are hours and even days when charts remain flat. Prices can spike when you least expect it and either they take you out at your stop loss or they make 30-40 pip moves when you aren’t in any trades. You can have a couple of great winning days in a row and then BAM! You give it all back plus some when price action starts working against you.

It’s kind of like spending all day in Gladiator School. You’re damned lucky if you can get out with your skin intact on most days.

But as an experienced Forex trader, this also means you’ve picked up some valuable skills along the way, and it would be an absolute shame if you didn’t put those skills to good use when you have the chance.

And this is that chance.

Why?

Because many Forex brokers have recently started adding CFDs to the list of available charts you can now trade through your Forex broker (and Yes, several of them accept US and Canadian based clients).

What is a CFD, you ask?

A CFD is a Contract For Difference, which is a fancy way to say it’s a way to “bet” that the price of an item will go Up or Down.

There is a lot more to it, but all that really matters for our purposes is that Forex Brokers have been adding a lot of different CFDs lately, and by doing so they’ve given their clients the absolute best shot at banking winning trades they’ve EVER had!

Specifically I’m talking about CFDs like the S&P500 (which is called the US500 by your broker), Crude Oil (called USOil or WTICrude, which are the same chart) and NASDAQ (which is called both the NAS100 and NASTECH in the Forex world, depending on the broker).

Given the amount of leverage you have available to you as a Forex trader, you can get into a Micro level S&P trade for only about $16 per contract. A Micro Oil trade only requires around $3 while the NAS100 takes a whopping $43.

This means virtually anyone who has an account with a broker that offers these CFDs can get into these trades.

And Don’t Think You’re Just Trading Pennies When Trading Micros.

The NAS100 pays out at $1 per point when trading a Micro lot. And with multiple average daily moves of 20-40 points, you could clear $100 a session trading a single micro-lot.

Now compare that to traders who open actual Futures accounts to trade the S&P500 or the NASDAQ. The recently approved Micro accounts require a minimum of $400 just to open a trade, then you need additional cash in your account to deal with any draw-downs.

And to trade a full contract on the S&P 500 or NASDAQ through a futures broker would take anywhere from $5,000 to $10,000 or more, depending on your broker’s requirements.

Suddenly, trading micro lot CFDs for only $3 to $43 through a Forex broker doesn’t sound so bad, does it.

So Why Should You Start Trading CFD’s?

In a word: PREDICTABILITY.

The Holy Grail for all traders, whether they know it or not.

And I’m not talking about predicting if price will go up or down (although you’ll see shortly that’s fairly simple to do as well with CFDs).

I’m talking about being able to predict WHEN the market is going to get hot.

You know how you can waste hours sitting in front of your Forex charts, hoping and praying that something will happen to give you an entry?

You can waste hours, and even days, and never make a single dime if the markets are flat.

Why Are CFD's So Predictable?

The American-based CFDs get hot exactly at 9:30 a.m. eastern time (New York time), Monday through Friday except for major holidays like Christmas and New Years.

The CFDs based in France, Germany, the UK, Japan, Australia, etc., all get hot at the exact moment the “market” opens for their respective CFD as well.

And that is as close to a stone cold guarantee as you’ll ever get in trading.

You see, these CFD’s are actually traded around the clock, just like Forex pairs, in what is called Off-Market or After-Market Trading.

But at 9:30 a.m. eastern time, when the actual indices markets which are based in the United States open for business, the volume on the S&P trades, for instance, rises ten-fold or more.

This can and does translate into moves of 5, 10, even 20 points on truly volatile days.

And just so you know, a “point” move in Indices equals a 10 pip move in their Forex version.

That means you could be looking at 50, 100, even 200 pip moves in the first few minutes of trading after the markets open at 9:30 a.m. eastern.

No more wasting hours in front of your PC or staring at your phone, waiting for something to happen.

At 9:29 a.m. eastern you need to be ready to trade, because the markets are just seconds away from being open for business, and some significant price moves will probably be there for the taking.

Just because you’re a “day trader” doesn’t mean you should be forced to spend all day in front of your charts.

Trading CFDs gives you total control over when you trade and frees up the rest of your day to focus on the other things in life you find important: family, friends, hobbies, hell, even taking 3 hour naps in the afternoon if that’s what you enjoy.

I Live in the USA and Work from 9-5. Will This Work For Me?

In a word, yes.

Brokers that happily accept US based clients such as Hugo’s Way offer CFD trading on a variety of different indices, some from the US, some from Europe and some from Asia and Australia.

What this means is no matter where you live, there is a session (Asian, London or New York) where at least a couple of Indices CFDs have an actual market that opens for business during your available sessions.

This gives you a legitimate shot at trading during the “hot” hours just like the traders who focus on the US indices.

The True Benefit You Get From Trading CFDs

Trading CFDs gives you the ability to limit your time in front of your charts, which translates into more free time to spend doing the things you love.

But more importantly, CFD Trading gives you the chance to finally start growing your trading account and using your profits for the things you want, instead of watching that money disappear again and again and again because the Forex currency markets are suddenly acting stupid again today.

You know what I mean.

You get two or three days where price action does pretty much exactly what you think it should, based on news events and indicator signals.

Then, for no apparent reason, price action does a 180 degree turn and starts doing exactly the opposite of what you’d expect. And you don’t dare switch to trading the opposite of what your method calls for, because you’ll just end up losing more when price action turns back to normal, again without warning.

Are You Trading To Make Money or Lose Money?

Look, I seriously doubt you got involved in Currency Trading because you were looking for creative ways to lose money.

Yet that seems to be the end result for traders who insist on focusing all of their time and energy and trading funds exclusively on Currency pairs.

Hopefully you’re not one of them.

But if you are, you can either keep doing what’s obviously not working (focusing solely on currency pairs) or you can put in a little time and effort (and very little of each, I might add) learning to trade CFDs and finally start seeing some positive returns on your investment.

If You’re Being Honest With Yourself Right Now, You Know This Is The Path You Should Be Exploring

Because let’s face facts: if what you were doing as a Forex trader was working, you wouldn’t be reading this right now, would you.

If you were trading with a system or method that was consistently winning, you wouldn’t quit using it and stop consistently making money to go looking for something new to try, would you?

No.

You’d be scaling up your lot sizes and making crazy serious bank with your current trading rules.

And Just To Give You A Quick Glimpse Right Now, Here Are A Couple Of Trades I took This Morning On The US500 (The FX Version Of The S&P 500) And On The USOil Chart

I don’t know if you can read the “results” from the trades, but I spent about 4 minutes in a series of Sell trades on the US500. 1 trade stopped out at $-120, but the other two closed in profit at $341 and $291, for an overall net gain of $511 in 4 minutes. The Oil trade took a little longer, but I closed it out at +$200 just before 10 a.m. this morning.

So I spent less than an hour in the Oil trade and only about 4 minutes in the US500 trade, and my day was done with +$711.

This is a 5 pip Renko chart (not a time based chart) with two indicators running through the Renko boxes: the Renko Trend indicator, which is the slower rolling line that is positioned most of the time above price action in this shot, and the Renko Signal indicator, which is the line which “hugs” price action. The indicator in the window below price action is called ChopAlert, which was designed to work exclusively with Renko charts. I use this as a warning sign when price enters a region where it might be expected for price to range tightly.

This Is How I Trade This Setup Every Single Trading Day

I use the Renko Trend indicator for my trend analysis. If the Renko Trend is Lime Green, it means the trend is up. If the line is Magenta, it means the trend is down.

I use the Renko Signal indicator for my entries and exits. Lime Green means Buy, Magenta means Sell. If I am in a Buy trade and the Signal indicator turns Magenta and locks in (meaning the box closes which created the color change) I exit the trade. If price resumes in the original direction, I can re-enter the trade if conditions permit.

Selling works the same way. If I am in a Sell trade and the Renko Signal Line turns Lime Green and the box which prompted the color change closes with the Signal Line Still Lime Green, I exit the Sell trade. If price resumes in the original direction, I can re-enter the trade if conditions permit.

I use the ChopAlert indicator strictly as a warning sign that price is entering or exiting a area where tight ranging (and some potentially very bad trades) might be found. A Green line in Chop Alert means there are no worries about taking trades. A Yellow line means proceed with caution because price is at an area where you might end up ranging. A Red line means price is inside a tight range and avoid taking any trades until the lines returns to either Yellow or Green.

Knowing this, you can look at today’s price action and find 6 valid trade signals (4 sell, 2 buy). A couple of them would have ended at break even or a small loss, depending on how you place your stop (we give you some ideas to try inside the training area). The remaining four trades were all solid winners, and trading a single full contract using the rules we recommend would have brought back 105 pips for a total gain of $1,050 (before adjusting for the possible small losses on the two small possible losing trades).