Share this page:
Stay connected:
Welcome to the Citywire Money Forums, where members share investment ideas and discuss everything to do with their money.

You'll need to log in or set up an account to start new discussions or reply to existing ones. See you inside!



Has anyone traded CFDs?
Posted: 18 November 2013 19:05:20(UTC)

Joined: 07/04/2011(UTC)
Posts: 38

Thanks: 9 times
Was thanked: 7 time(s) in 5 post(s)
Following a recent small windfall, I have been debating how to invest it, and the options are thin. I've exhausted my ISA entitlement, I cannot add to my pension because it's in drawdown (I wouldn't put any more into a pension anyway!) and savings accounts are rubbish. So, I'm having a little tickle with CFDs through Galvan.

Does anyone have any experience with CFDs and Galvan?
Alan Selwood
Posted: 18 November 2013 19:42:22(UTC)

Joined: 17/12/2011(UTC)
Posts: 2,735

Thanks: 561 times
Was thanked: 4568 time(s) in 1643 post(s)
Not me!

What makes me averse to such trading, apart from the prominent risk warning that you can lose MORE than your stake, is comments like the following, which is drawn word-for-word from their website:

"Our aim is to provide investors of all sizes with professional advice and an approachable service. That’s why each client at Galvan is looked after by their own personal trader. We tell you specifically what we’re recommending, where to take profits and how to manage your exposure".

Think about it.

Why don't they avoid advertising, and take all those profits for themselves if they're that good at it?

Also, if they can afford to employ someone to be your own personal trader, either they have hundreds or thousands of other clients for whom the same person is their 'personal trader' (what's personal about it with that number to look after?) or they are making so much profit out of the deal that they can afford to employ people on a one-to-one basis (or near enough) out of their take. So since they need to make, say, £30,000 p.a. to cover that trader's cost of employment, you the client (or punter, a.k.a. sucker) are going to have to lose enough money each year to cover those costs. Does it still sound so attractive? I think a good translation of 'personal trader' in such types of business is "person whose job it is to sell you more deals and persuade you to persist even after you've lost loads of money".

What's wrong with a plain non-ISA, non-pension investment account instead?

I'm sure it's cheaper, safer, less stressful, more profitable on average over more than a few weeks.

5 users thanked Alan Selwood for this post.
Micawber on 19/11/2013(UTC), c brown on 19/11/2013(UTC), Ant H on 24/11/2013(UTC), Guest on 26/11/2013(UTC), Richard_L on 27/05/2018(UTC)
Posted: 24 November 2013 13:51:52(UTC)

Joined: 02/10/2007(UTC)
Posts: 23

Thanks: 1 times
Was thanked: 15 time(s) in 9 post(s)
I have used CFD's extensively and found them to be a fantastic way to gain access to every global market (bonds, commodities, equities, indices and currencies).

They are only suitable for use as an investment vehicle if you are a skilled trader and are fully aware of downside risks and assocaited transaction costs.

If you are not used to running trading positions to generate annual income or have tried without success in the past, then they are not for you.

For myself, I have no problem putting 10,000 to 20,000 in a margin account and "punting" sterling/yen or copper or BP or the Dax index from a long or short perspective with stop profit/loss positions to garner some optionality (upside/downside limits) or using options.

But I stress, markets make money out of ignorance, so if you haven't been on the learning curve you are at risk.

I mostly used IG Index, Saxo and GNI and found each to be very strong in certain areas and "only" competitive in others.

If I were you, I would try them out, do some learning and try very very hard to become professional by monitoring your behavioural changes from when you put the trade on, to when the position is running, and make an honest assessment of whether you recognise your own strengths and weaknesses.
3 users thanked hooligan for this post.
BM Shah on 24/11/2013(UTC), Guest on 26/11/2013(UTC), claudescott on 04/01/2014(UTC)
Posted: 24 November 2013 15:34:30(UTC)

Joined: 02/11/2013(UTC)
Posts: 1

Thanks: 69 times
Was thanked: 1 time(s) in 1 post(s)
LouisV-W4;21714 wrote:
Following a recent small windfall, I have been debating how to invest it, and the options are thin. I've exhausted my ISA entitlement, I cannot add to my pension because it's in drawdown (I wouldn't put any more into a pension anyway!) and savings accounts are rubbish. So, I'm having a little tickle with CFDs through Galvan.

Does anyone have any experience with CFDs and Galvan?

I tried Galvin with 5K some years ago wanting to be able to hedge my overall investments using shorting, but knowing nothing about it or T.A.; however I believe their recommendations were based on what was clearly already in the price, e.g. news, and I believe they basically 'churned' my 5K until it, and more was gone - promoting longs more than shorts without consideration to what I wanted in the first place. They didn't even get back to me when they'd finally lost it all (except for me to pay the outstanding balance). Blue Index were exactly the same. Neither of these would provide any verification of their performance but plenty of excuses as to why they couldn't (confidential to clients of course).

IMHO You need to LEARN to do it yourself, but Spread Betting rather than CFD's may be more appropriate unless you wish to risk large amounts.
Best wishes
1 user thanked Richard_L for this post.
Guest on 26/11/2013(UTC)
Anthony Henderson-Begg
Posted: 17 July 2015 09:00:20(UTC)

Joined: 17/07/2015(UTC)
Posts: 1

Was thanked: 1 time(s) in 1 post(s)
I have had a very bad experience with Galvan Trading over the past year during which they lost my entire capital. CFD's are very risky and you should be ready to lose all your investment. With Galvan, you are almost certain to lose your money. I have made an independent analysis of the companies they recommended, and I have come to the conclusion that the advice and timing were ill advised.
1 user thanked Anthony Henderson-Begg for this post.
Richard_L on 27/05/2018(UTC)
david townsend
Posted: 10 May 2016 08:43:55(UTC)

Joined: 10/05/2016(UTC)
Posts: 2

My advice is to stick to what you know. I would only risk what you can afford to loose. I personally have never traded CFDs but have colleagues who have done well from them.
Aimstocks Microcaps
Posted: 27 May 2018 11:22:25(UTC)

Joined: 23/09/2016(UTC)
Posts: 7

Was thanked: 1 time(s) in 1 post(s)
I have experimented with CFDs this month.

Researched a provider that has guaranteed stop losses.

Corespreads has.

I put in 1.5k used their app and bought Chesapeake energy at around 3 and kinder Morgan at around 16.

The CHK went up a lot as oil ramped up. I then put on a bigger trade at around 30gbp a point at I think 3.5 CHK then went up to 4.5.

As this was occurring I was thinking this looks easy as my stake went from 1.5k to to at maximum 11 or 12k.

As it went up I tried to buy KMI twice but it used up all my margin and I got a margin call so had to cancel it twice losing 1k each time.

On Friday oil fell and Chk dropped about 6pc.

My account value is now 7k and I am just keeping the CHK trade on which is about 30 quid a point with a guaranteed stop loss at 10pc off purchase price.

So not sure yet whether to suggest it or not.

I was lucky to buy CHK when oil when up so it went up from 3 to 4.5.

If u are doing it suggest u
1 use core spreads as they have guaranteed stop losses
2 make sure to call and check or email them to check your GSL is ACTUALLY ON AS I have found sometimes it doesn’t execute THIS COULD SPELL DISASTER so playing with fire

There is more to be said as they do have UK stocks you put trades on. I bought microfocus when it crashed last week or so but only a pound a point or so.
Aimstocks Microcaps
Posted: 27 May 2018 11:34:12(UTC)

Joined: 23/09/2016(UTC)
Posts: 7

Was thanked: 1 time(s) in 1 post(s)
By the way I experimented in spreadbetting in 2010 and found that to be a rip off as it is a synthetic market and they surf the price to your stop loss and take you out when the real price doesn’t do that.

I have found with CFDs this doesn’t happen so it is quite good.

What I would suggest is you need to find a beaten down big stock that they offer then buy that with a guaranteed stop loss that it is very unlikely to reach.

If I had funds now I would buy

Kinder Morgan at 16 with a guaranteed stop loss at 14 which it shouldn’t reach but it could do to 30.
I would buy at 30gbp a point.

Then I might buy CHK Chesapeake here also.

Maybe buy General Electric at current price.

Perhaps microfocus but don’t know much about it.

The way it would work I think is if you buy Kunder Morgan KMI at 16 with a stop loss at 14 is that that stop loss shouldn’t get triggered. KMI could move up to 30 as dividend recovers.

If you have it on at 30gpb a point each dollar price moves up you make 3k gbp.

To have a stop loss at 14 you need to have a fair bit in the account but you can do small test trades to see how it all works.

I would expect KMI not to go to 14 but to move into 20s this year. If it goes to 22 you make 18k.

I would leave the trade on till it hits the target rather than buying and selling daily or whatever.

I can’t put on the KMI trade as not enough in my account I have only got the CHK trade on.

Will update at some point if anything interesting happens with it.
Posted: 27 May 2018 11:39:21(UTC)

Joined: 02/10/2007(UTC)
Posts: 23

Thanks: 1 times
Was thanked: 15 time(s) in 9 post(s)
yes. great way to trade, gains are tax free, available on anything that is traded, not a way to invest for the long term. as with any trading tool, stop losses/profits are available, but you won't necessarily get filled unless you pay a little more for a "guaranteed fill". what you are vulnerable to is algos that search for "stops", take you out, then move the price back to "normal".
great fun though, enjoy!
here's thirteen (not ten) platforms that you can compared (I use IG).
Keith Cobby
Posted: 27 May 2018 13:25:15(UTC)

Joined: 07/03/2012(UTC)
Posts: 597

Thanks: 384 times
Was thanked: 942 time(s) in 379 post(s)
Nothing wrong with CFDs although obviously gambling rather than investing.
King Lodos
Posted: 27 May 2018 16:21:55(UTC)

Joined: 05/01/2016(UTC)
Posts: 3,051

Thanks: 722 times
Was thanked: 4775 time(s) in 1852 post(s)
I notice Fidelity China Special Situations uses CFDs sometimes to add to positions .. Maybe there's some tax or cheap leverage advantage for them.

In general, awful idea for retail investors.

When you understand the maths – that there's someone on the other end of every trade; it's a zero-sum-game; and the spread (which is appalling with a guaranteed stop) is the fee – it's just a betting shop .. And it's not designed for customers to win.

You can do fine taking obvious trades – I've done £6-10k in a day playing with demo accounts in real markets.

But like betting on anything else, it's deceptive – because you're never compensated quite enough for the risk you're taking .. whether it's on obvious trades or less obvious ones .. UNLESS you can spot an inefficiency (that's still an inefficiency once the spread's taken into account) you cannot win, long-term .. Probability will take care of that given enough rolls of the dice
1 user thanked King Lodos for this post.
Richard_L on 27/05/2018(UTC)
J Thomas
Posted: 27 May 2018 17:32:08(UTC)

Joined: 22/02/2012(UTC)
Posts: 309

Thanks: 375 times
Was thanked: 421 time(s) in 174 post(s)
CFDs....does that stand for Contracts For Dumb suckers?

Seriously, please avoid like the plague, novices will lose 100% of their capital with unlimited further liability.
3 users thanked J Thomas for this post.
Richard_L on 27/05/2018(UTC), King Lodos on 27/05/2018(UTC), Aminatidi on 27/05/2018(UTC)
+ Reply to discussion


Other markets