Articles of Interest

The webIRESS plus trading platform is the newest product to be released by Australian financial markets software giant, IRESS market technology. WebIRESS plus allows retail online traders the ability to take full advantage of the flexibility and speed offered by IOS plus from the comfort of their home or office.

Unlike the traditional IOS classic powering conventional webIRESS, IOS plus provides users with the flexibility of being able to utilize advanced web services technology in their automated trading strategies. webIRESS plus users are now able to build trading algorithms without having to install and run the IRESS desktop application saving time and money. Being server based the web services technology also provides significant redundancy advantages.

IOS plus has significant speed advantages over predecessor with order transmission speeds being improved by a whopping 150%, this means webIRESS plus users will be able to transmit orders to the market at speeds not previously available to retail clients in Australia. Faster execution translates into more trading opportunities. 

The old webIRESS has also had a makeover with webIRESS plus utilising the lasted in Java technology giving the front end interface a smooth visual appearance reminiscent of windows 7. Combined with an improved visual appearance webIRESS plus offers users advanced order types including being able to create multi legged contingent orders. 

Currently webIRESS plus is only being used for CFD trading, this is primarily because of the low latency order transmission times demanded by CFD traders. It is expected that webIRESS will shortly be adapted for online share and options trading also.

At present webIRESS plus is only being offered by CFD provider International Capital Markets (IC Markets), this is primarily due to customer demand for low latency CFD trading and the company’s drive to stay at the forefront of trading technology. It is expected that other CFD providers currently offering webIRESS will soon recognise the significant benefits of webIRESS plus add this revolutionary trading platform to their arsenal.

When choosing a CFD provider you should consider the platform being offered whether it will give you an edge in your trading. If you are a day trader or scalper you should definitely consider the webIRESS plus as it will give you a significant speed advantage over all other platforms in the market allowing you to take advantage of fast moving markets and rapid match price changes in the opening and closing market phases. IRESS has once again set a new benchmark for high speed low latency trading in Australia.

To find out more about CFD trading on the webIRESS plus platform you can download our free CFD guide.

Before you start trading Contracts for difference it is important to obtain a few tips from the professionals to make sure that you do not make many of the costly mistakes that newbie traders make. Below are three trading pointers which will help you in your CFD trading success.

1. Manage your Positions
Repeatedly new traders spend a significant amount of time selecting, planning and executing new positions, however they regularly make the mistake of exiting these trades with much less thought. This is unfortunate as it is the exit which will determine whether a trade has been profitable or not.

It is human nature to take profits hastily while the concern of incurring a loss will see the same trader leaving poorly performing positions open in the hope that prices will move in the correct direction and reduce losses or even turn them into profitable trades.

Numerous new traders forget about the old saying “Let your profits run and cut your losses short”. As the proverb states if you have a profitable position, it is best to allow that trade to realize its full potential, as opposed to closing it out at the very first sign of a small return. On the other hand, if you happen to hold a position that is moving against you, it is best to move quickly to exit that position, before the loss becomes too great.

If you're managing your trades properly, your average winning trade should be significantly larger than your average losing trade. Once you have the discipline to buy and sell in this way, you should be able to achieve overall profitability even when only half of your trades are winners. A lot of traders make the mistake of not closing poorly performing positions fast enough. One tool that makes this less complicated is a stop-loss order.

After you have determined a price level that corresponds with the amount of risk that you are prepared to take on a particular trade, a stop-loss order can be placed at this level to automatically close out the trade. This removes the human aspect from the exit, reducing the risk that the emotion of hope will interfere with rational decision making.

It is important to understand that a stop-loss order simply provides a trigger point for the execution of an order. If a sell stop has been placed on a long position, the stop-loss will be activated if the price trades at or beneath the nominated stop level. Occasionally, this may lead to trades being executed a price that is less favorable than the nominated stop-loss price. This is known as slippage.

2. Understand the instrument that you're trading
Being over-the-counter products, there are various differences in the contract specifications of CFDs. If you are thinking of trading these products, it is critical to know what these specifications are.

You must also be aware of the influence that foreign exchange fluctuations might have on your holdings. If the base currency of the CFD rises against the base currency of your account your profits could be eroded by any currency fluctuation or your losses might be made worse.

Most CFD traders trade CFDs based on stocks listed in their home country. The simple reason for this is that traders are more comfortable trading CFDs that they're familiar with. Most traders also benefit from the convenience of trading their home market as it isn't practical to sit up for half the night to trade a Contract for difference over a share listed on an exchange in another part of the world?

In lots of cases it is much better to stick with CFDs based on equities listed on exchanges that you're familiar with as opposed to trading Contracts for difference based on stocks listed on markets you don't fully understand.

3. Use the correct order types
You should treat trading as a serious business. As such, you must take some time to make sure that you thoroughly understand the tools of your business. Many CFD traders miss chances or have been stopped up out of trades at the wrong time just because they placed the wrong kind of order.
                   
At the very least, be certain to become familiar with the following order types:

Market order: This kind of order is utilized to execute a trade at the present market price.

Stop-order: This order type is utilized to exit a trade at a specific price. Stop-orders are placed at a level that's worse than prices presently available in the market. On a long position, the stop-loss order to sell would be located below the present market price. Conversely, on a short position, the stop-loss order to buy would be placed at a level greater than present market prices.

Limit order: A limit order is used to exit a trade. Limit orders are placed at a level that is better than the present market price. When seeking to lock-in profits on an open long position, a limit order to sell would be placed at a level greater than current market prices. If seeking to lock-in profits on a short position, a limit order to buy would be placed at a level underneath current market prices.

You must always understand that as Contracts for difference are leveraged and that buying and selling them can be risky. However if used correctly Contracts for difference will become a valuable tool within your trading arsenal.

To find out more about CFDs you can download our complimentary CFD trading guide.

Many amateur CFD traders start trading the hard way without learning from experienced traders who have made all the expensive errors traders make on their path to success. To help you understand the most common errors made by traders and to prevent you from making the same errors with your own money we've outlined a few common mistakes below.

1. Trading for the incorrect reasons
Most people will commence trading with the intention of making a return from day one. However, there are a few people who trade for entertainment. If you are serious about making a profit, it's important that you treat your trading like a business. Those who invest for entertainment will be lucky if they make money, in reality more often than not they will lose.

2. Over-Trading
You should avoid the temptation to over-trade. Over trading is really a risk for those traders that are not following a technique, choosing to sit down on the sidelines until a clear trend emerges is in itself a legitimate strategy. You should avoid the mistake of fully leveraging your positions simply because you've got free equity available. It is also important to make sure that you don't invest with money that you cannot afford to lose.

3. Psychological and Emotional Mistakes
Developing the mind-set that you need to get each trade right is often a dangerous mistake to make if you cannot accept the very fact that you're going to make errors. You may find it hard to close out of a losing position, instead your mind will find ways to persuade itself that the trade will swing around and happen to become profitable. There is a danger that subconsciously you will become blind to evidence that suggests you are wrong.

You have to recognize that you will not get each trade correct and that you don’t need to get each trade correct, this will enable you to deal with your trades effectively. Being in the wrong is something that we frequently feel bad about. We're taught through positive reinforcement that we should feel better about being correct. This repeatedly presents problems when trading.

Losing trades may cause emotional distress and prevent you from correctly analysing the market. This can present a risk that you'll start over-trading in order to make back losses or to “get even” with the market. On the flip-side, winning trades can produce feelings of excitement and invincibility. If you make the error of permitting this emotion to take hold, you may find yourself taking unnecessary risk or making stupid errors through carelessness.

You should aim to keep your trading related emotions under control. Wise traders will focus on the downside risk potential of each trade and will make sure that this is within their pre-defined parameters outlined in their trading strategy.

4. Not understanding the suitability of Contracts for difference
Trading CFDs has enhanced the trading possibilities for a great many retail traders. CFDs are an ideal product for traders with a short-term time horizon along with a desire to increase their market exposure on a small amount of capital.

It is important to remember that contracts for difference are not always suitable for long-term traders due to financing expenses which can build up over time. In addition traders who don't supervise their open positions won't find CFDs suitable. You always need to ensure that the amount of money that you allocate to your trading account is an amount that you would be able to afford to loose.

Before you start trading Contracts for difference you ought to be familiar with the negative aspects linked to the product. As with all geared financial products, the risks are going to be higher if you don’t take the time to understand the product.

For traders that understand how CFDs work and learn to minimize their risks, there can be significant benefits from CFD trading. Through the use of leverage plus the convenience of trading, retail traders now have greater opportunities than they have ever had before.

If you would like to learn more about CFD trading and how to develop a trading plan you can download and read our free guide.

Trading mistakes can be made by even the most experienced professionals. Most mistakes made by traders come about as a result of a lack of preparation, knowledge or discipline. Whilst it is important to learn from your mistakes, it is even better and much less expensive to learn from the mistakes of others.

Below are three of the most common mistakes made by CFD traders:

1. Excessive Leverage
One of the main benefits of CFD trading is the ability to gain exposure to a share, index or foreign exchange contract with a relatively small capital outlay. Rather than paying for the full notional value of the CFD position CFD traders can enter into positions with margins as low as 5% or even less. It is important to note that although a smaller capital outlay is required to open the position the CFD trader is still exposed to the price movement of the share CFD for the full notional value of the position. A CFD trader trading a CFD at 5% margin is leveraging their initial outlay by 20 times, meaning a $5,000 deposit could be used to open a $200,000 CFD position.

As only a fraction of the face-value of the trade is outlaid when trading CFDs a small price change could result in substantial gains but also substantial losses. For example when trading a CFD on a margin of 5%, a price rise of 1% in the underlying market may result in gains of 20%, however, if price fell by 1%, it may result in a loss of 20% of the amount required to open the position.

It is important to remember that leverage is a double-edged sword not only can it work for you but if not managed correctly it can also work against you, often novice trades ignore the fact that if unmanaged leverage can result in substantial losses.

2. Not understanding the impact of trade sizes on your account
Due to the leverage associated with CFD trading, relatively small outlays can result in large moves in your overall account balance.

For example buying 10,000 CFDs priced as $2.40 on a margin of 5% requires an outlay of only $1,200. With an outlay of only $1,200 you can hold a $24,000 CFD position. Should the price of this position move one cent it will have an impact of $100 on the profit or loss on the traders account.

If the price of the this position increased by 12 cents a profit of $1,200 would have been made, However, if the price of the position fell by the same amount a loss of $1,200 would have been made.

The overall impact of any price movement will depend on the traders overall account balance. For a trader with an account balance of $1,500, the aforementioned trade would have had a significant impact on the traders account profit and loss. Should a trader with an account balance of $40,000 open the same position the relative impact would be much less significant.

A loss of $1,200 on a $1,500 account would result in the 80% of the total account balance being lost. However, a loss of $1,200 on a $40,000 account would result in a loss of only 3% of the account balance.

3. Trading in too large parcels
It is important to calculate the exposure your trade size before placing the trade. It is common for novice CFD traders the simply trade the maximum size available to the based on their account balance without considering the amount of market exposure associated with the position.

There are a variety of methods traders can adopt in order to calculate position size. A simply strategy is to determine an acceptable amount of risk capital should the trade go against you and calculate an acceptable position size base on this.

Should you want to restrict losses on any given trade to $200 you would calculate your position size based on your stop-loss price. For example, if the CFD was priced at $1.40 and you stop-loss was at $1.15 your risk amount would be $0.25, to calculate your position size you would simply divide the loss you would be prepared to take by the risk amount. In this case this would be $200 / $0.25 = 800, therefore your position size should be 800 units.

The method outlined above is known as fixed fractional position sizing in which a certain percentage of the overall account balance is risked on each trade. Other methods include allocating a fixed dollar amount to each trade, buying or selling a fixed number of CFDs in each trade or varying the size trades according to the profitability of your account.

Using a position sizing strategy will help you avoid the mistake of placing all of your eggs in one basket.

To find out more about CFD trading you can download our free guide.

In the early days investors wanting to borrow money to invest had few choices, either borrow money from the bank to buy shares or call your stockbroker and apply for a margin loan.

In 2003 traders and investors in Australia were given another choice, CFDs. Since their introduction the industry has changed, CFDs being a simple form of margin lending have become the fastest growing derivative product in the country, outstripping the grow seen in the warrants market during the mid 1990’s.

No longer does a retail investor need to apply for a bank loan or deal with expensive full service brokers. CFDs have revolutionized the financial services industry, retail investors can now open a CFD account online in minutes and be up and trading before the end of the day, executing all of their orders in real-time online.

Unlike margin lending CFDs are typically traded over the internet with the trader’s portfolio being marked to market throughout the trading day, this is substantially different to the end of day portfolio revaluations used by margin lenders. Real-time portfolio margining means that traders can properly manage risk during the trading day rather than having to wait for statements to be generated at the end of the day.

Like shares bought using a margin loan CFDs offer the holder the ability to receive a dividend, however in most cases franking credits are not passed on the holder of a CFD unlike that that of a margin loan. The reason franking credits are not passed when holding a CFD is because the owner of a CFD holds an over-the-counter derivative contract and not the physical share. Not owning the physical share when holding a CFD position also means that the owner of a CFD is not entitled to voting rights in the listed company over which the CFD is based. Many CFD traders only hold their positions for a short period of time and are not interested in voting or franking credits but instead are interested in making a profit from the short term price changes of the share over which the CFD is based.

One of the most significant advantages of CFDs is that traders are able to sell them just as easily as they can buy them, what this means is that going long is just as easy as going short, allowing traders to profit in falling markets. With traditional margin lending short selling is difficult and near impossible.

CFDs are relatively cheap when compared to margin lending, typical brokers offering margin lending will charge 0.50% whereas a typical CFD provider will charge around 0.10%. One thing to be wary of is the interest rates charged by margin lenders and CFD providers. It is important to note that margin lenders will charge interest on the amount borrowed whereas CFD providers will charge interest on the full notional value of the open position, however CFD financing rates tend to be lower. Financing rates are an important cost to consider when comparing both products but this is less important for CFD traders that only hold their positions for a short period of time. 
 
Typically CFDs offer traders more leverage than conventional margin loans allowing traders to obtain a better return on their investment. You should also be aware that an increase in leverage can also result in an increase in risk, this is common with all leveraged products. The leverage offered by CFD providers can be as much as 100 times (1% margin) whereas margin lenders will generally only offer around 10 times leverage (10% margin) or less. Leverage will vary between each CFD provider and margin lender and is often determined on a stock by stock basis considering the market capitalisation of the stock and liquidity. 

As CFDs are an over-the-counter derivative product it is important to note that you do not own the underlying share or instrument over which the CFD is based, this also means that you cannot transfer your position to another CFD provider or stock broker you can only deal with the CFD provider that you opened up the position with. When you buy shares on a margin loan the shares are held in your name this means that you are able to move them freely from one stock broker to another.

CFDs suit short to medium term active traders looking to take advantage of market movements in both directions, however, margin lending is better suited to people who are looking for long-term investment opportunities and to take advantage of the tax benefits franking credits provide, in addition to voting rights. It is important to remember that both products are leveraged, as such should ensure that you adopt a proper money management plan and not utilise the leveraged offered to its full capacity.

To discover more about CFD trading and using CFDs in your trading plan, you can download our free CFD guide.

Direct Market Access CFDs or DMA CFDs are one of the most transparent types of CFDs available. DMA CFDs have the advantage of allowing participation in the underlying market of the stock over which the CFD is quoted. DMA CFDs are relatively new and have only become popular in Australia over the last few years however, continue to become popular as traders realize the transparency offered by this type of CFD. 
 
DMA CFDs have significant advantages over the more traditional over-the-counter (OTC) variety in that they allow the trader to participate in the opening and closing phases of the market. Being able to trade in these phases of the market offer significant advantages to traders as they are can receive the opening or closing price of the day. Traditional over-the-counter CFDs do not allow the trader to participate in these phases of the market thus preventing the trader from being able to receive some of the best prices of the trading day.

Despite the drawback of not being able to participate in the opening and closing phase of the market, over-the-counter CFDs do have the advantage of allowing the trader to buy or sell volumes that may not be available in the underlying market during normal trading hours.

DMA CFDs have become popular amongst day traders and scalpers. The main reason for their popularity is because DMA CFD providers allow CFD trades to flow onto the underlying market in the stock on which the CFD is based allowing active traders to take advantage of relatively small price movements. Using DMA CFDs also allows day traders to get set at the opening price at the start of the day and clear their positions during the closing price during the closing match phase.

One of the disadvantages of DMA CFDs is that generally DMA CFD providers do not offer guaranteed stop loss orders. Guaranteed stop loss orders have the benefit of allowing the trader to manage their downside risk. Slippage often occurs when using stop-loss orders, guaranteed stop-loss orders remove this risk altogether.

It is important to be aware that prior to opening a CFD account with you should be aware that when trading DMA CFDs you will required to deposit a higher initial margin amount than the over-the-counter (OTC) variety. In addition to higher margins many DMA CFD providers will not able to offer you CFDs over indices and foreign exchange contracts due to these contracts being over-the-counter in their very nature.

There are relatively few platforms available that offer DMA CFDs, one of the most common platforms in the Australian market is webIRESS. WebIRESS offers the speed and reliability day traders and scalpers need in addition to a variety of different order types such as trailing stop-loss orders. Another popular platform is ProDeal, ProDeal offers all of the advantages webIRESS offers with the additional benefit of being able to trade over-the-counter CFDs from the same platform allowing traders to trade CFDs on indices and forex from their DMA CFD account.

It is important that before making the commitment to start trading DMA CFDs that you understand the risks associated with the product. Like all leveraged products trading CFDs can offer substantial rewards however there are also risks involved that if not managed correctly can lead to losses greater than the trader’s initial deposit.

Before choosing a DMA CFD provider you should ensure that to trail their demo platform and read their Product Disclosure Statement which outlines in detail the fees and charges, provides trading examples, and outlines the types of CFDs offered along with the risks and benefits of trading CFDs. You should ensure that the CFD provider you choose is able to offer you the platform and products that suit your trading strategy.

To find out more about DMA CFDs download our free guide.

Like all financial products there are risks trading CFDs. Risk is generally linked to returns, the riskier the investment the higher the potential returns, however if risk is managed correctly it can be significantly reduced. When trading CFDs this can be done through the use of stop-loss orders and simple portfolio hedging. This article explains the key risks associated with trading CFDs and what can be done to reduce them without having an effect on the significant returns that CFDs can provide.

Before trading CFDs you must understand that CFDs are a leveraged product and that leverage can work for you as well as against you. Like all leveraged products a small price movement can result in significant returns but also significant losses. The variety of orders types available for CFD traders allow the risks associated with adverse price movements to be significantly reduced. CFD traders are able to set their orders at prices which they are prepared to close out their positions and realise a loss. Common order types used to mitigate risk are stop-loss orders, trailing stop-loss orders and guaranteed stop-loss orders.

Stop-loss orders
This is the most common order type used by traders to manage risk. A stop-loss order is simply an order to close an open position that is placed at a price below or above the current market price at a price that the CFD trader is willing to close out their open position. It is important to note that stop-loss orders can be prone to slippage should the price of the CFD gap, this is a common occurrence when trading share CFDs.

Trailing Stop-loss orders
Trailing stop-loss orders are similar to stop-loss orders with the exception that the price of the order moves in accordance with a pre-determined distance from the current trading price, this distance is set by the trader at the time of placing the order. It is important to note that the price of the order will only change if the price of the instrument moves in a favourable direction, should the price move against the trader the price of the trailing stop-loss order will not change. This order type works like a ratchet, in that it can be used to lock in profits as the position moves in favour of the CFD trader without the need for the trader to constantly change the price of their stop-loss order.

Guaranteed Stop-Loss orders
Guaranteed stop-loss orders have become common in recent times due to traders being able to guarantee their potential losses. This order type is commonly used when trading share CFDs simply because share CFDs are prone to slippage and gapping during the opening phase of the market. It is important to note that when using guaranteed stop-loss orders your CFD provider will often charge you a premium, this is like an insurance premium guaranteeing that you will be filled at the price your stop-loss order is placed.

Aside from using orders to manage your risk when trading CFDs many traders use other financial products such as shares and options to hedge their CFD positions.

Shares are commonly used to hedge CFD positions or vice versa, these are often used by traders that hold a portfolio of stocks as well as a short term CFD trading account.  CFDs are often used to trade short term price movements of the stocks within their portfolio without having to sell their stocks and realise any capital gain.

Options are used by some CFD traders as a form of guaranteed stop loss. Options have an advantage over guaranteed stop-loss orders in that they are often cheaper. Hedging CFD positions using options is commonly used by more sophisticated traders that understand the core components of an options contract and how to choose the most appropriate contract to hedge their CFD position.

Aside for managing risk using order types and hedging strategies all CFD traders should ensure that they adopt strict money management techniques, meaning that they should not utilise excessive leverage or overexpose themselves to one particular CFD or sector. Utilising too much leverage is the single most common mistake made by novice CFD traders.

Before opening a real CFD account you should ensure that you practice trading on a demo account to so that you understand how to use the multiple order types available that will help you manage your risk. Remember CFD trading can be extremely rewarding if the risks are controlled.

To learn more about CFD trading you can download our free CFD trading guide.

Day trading contracts for difference (CFDs), stocks or indices, has become popular in recent times. The popularity of day trading has been largely due to numerous advertisements for money making systems, seminars and educational courses that guarantee overnight success. Many of these courses also profess to be low risk and require only a small capital outlay. The truth is, trading is hard work, the more time you devote developing a successful trading plan the more likely it is that you will succeed, however you should be aware that success will not come overnight or without losses.

Once you have put in the time and effort to formulate a trading strategy only then should you consider becoming a professional day trader. Day trading offers many lifestyle benefits including the ability to be your own boss, you no longer need to go into work and take orders from your boss. However, you should not take this freedom for granted, trading should be treated as a business and you must be discipline in order to succeed. If you do not apply discipline to your trading you should not consider trading as a career.

There are significant lifestyle benefits that come with day trading, being you own boss allows you to chose your working hours and even your office, you can work from home or whilst on holidays. Getting into day trading requires little capital outlay as all a Day trader needs is a trading account, computer and internet access. Before you run out and buy yourself a new computer remember that you should also have sufficient funds in your trading account, a common mistake day traders make is that they are undercapitalized when they first start. You should start with at least $20,000 - $30,000 this will allow you to develop and refine your trading strategy and allow you to recover from mistakes. 

The time you spend analyzing and watching the markets will depend the trading strategy that you adopt. Day trading and scalping requires constant monitoring of the market as day traders look to profit from small price movements, whilst swing trading requires that trades be held open for 2-3 days, meaning that you do not need to spend as much time in front of the computer.

Although trading professionally from home allows you to choose your own working hours, it is very important to be aware of key times during the day, in the stock market these are the opening and closing phases of the market, in Australia this is 10am and 4pm. You should also be aware of major overseas market movements and how they affect the local market that you are trading and specific announcements relating to the company’s that you are trading.

Do not believe the promises of guaranteed returns develop and back test your own trading strategies that suit your lifestyle and the time you have to spend on your trading. Trade your strategy and refine it as required, remember you will make mistakes but don’t be disillusioned this is common, simply understand where you went wrong and refine your strategy. Once you have developed a strategy that works for you and suits your lifestyle you will be rewarded with the advantages that being a day trader has.

To learn more about trading CFDs from home for a living you should read this free CFD trading guide. There are a number of CFD providers that can assist you in getting started, but be sure to choose a CFD provider that is able to offer you a reliable trading platform.

Direct Market Access or DMA is the often used to describe a variety of CFDs that have become popular in the Australia market, these are affectionately known as DMA CFDs. With DMA CFDs your trade is passed directly through to the underlying share market with no dealer or market maker intervention, this means that orders are executed at the true market price and in a timely manner with no re-quotes. Trading DMA CFDs is much like trading shares online.

DMA CFDs provide complete order transparency. Traders are also able to participate in the market depth of the underlying security on which the CFD is based by joining a bid or offer queue, they are also able to participate in the open and closing auction phases of the market. DMA CFDs provide all of the benefits of trading shares with the additional leverage that CFDs offer.

Trading DMA CFDs is very similar to trading shares, traders are able to hit the bid or offer or join the buy or sell queue. DMA CFD traders have significant advantages over traders using market made CFDs in that they have the potential to enter and exit trades at superior prices.

When trading DMA CFDs you will be required to subscribe to exchange data, the cost of data varies from exchange to exchange. Once subscribed you will have access to real time prices and market depth allowing you to see the number of buyers and sellers at each different price level and participate in order queues allowing partial fills and superior execution.

One disadvantage of DMA CFDs is that guaranteed stop losses are not offered, typically DMA CFDs traders use options to manage their downside risk however these can be overly complicated for the novice trader.  

When trading DMA CFDs traders have the ability to become price makers meaning that when an order is placed it is transmitted to the real market and can have an effect on the price of the stock over which the CFD is based.

Trading CFDs using a Direct Market Access (DMA) model is best suited for frequent traders that trade on an intraday basis. Frequent traders will find that DMA CFDs will enable them to trade freely without dealer intervention and obtain better prices when buying and selling. DMA CFDs are also suited to active day traders and scalpers who are looking to profit from small price changes quickly.

There are a number of CFD platforms that you can trade DMA share CFDs on, the two most common platforms in Australia are webIRESS and ProDeal. Both platforms allow traders to participate in the market depth of the DMA CFD which they are trading. The webIRESS platform is also very popular within the share trading community, mainly because of the variety of order types on offer, whereas ProDeal is very popular amongst CFD traders, this is because of the broad range of CFD on offer and its advanced charting functionality.

It is important to note that before starting to trade DMA CFDs you consider whether this type of CFD suits your trading style, choosing the wrong CFD type will have an effect on the success of your trading strategy.

You can find out more about DMA CFDs in our FREE CFD guide.