The Main 5 Reasons Why Day Traders Opt For Contract For Difference

By far the most general question asked among budding DMA CFD traders is ‘what are the most profitable DMA CFD day trading schemes or the best winning DMA CFD trading strategies that the profitable DMA CFD traders utilize?’  

Here we’ll take a look at the top 5 reasons why day traders prefer to trade a contract for difference over different derivative products and uncover the most general DMA CFD day trading projects.  

No overnight investing DMA CFDs have definitely evolved into the ideal choice for short term day traders and there are a couple of basic reasons for this. Initially, DMA CFDs incur a financing rate when you keep a position overnight. The financing for long positions is usually the RBA rate (cash rate) +2%. So if the RBA level is 7% then you pay 9% each year calculated back as a day rate. One variant to evade this is to take away your position before the trading day is over, thus evading the DMA CFD financing rates.  

DMA CFD Leverage for day traders is incredible Another key reason that DMA CFD day trading strategies are so popular is because of the fantastic leverage you have access to. You see, if you had $5,000 in a stock trading account then you are able to just trade $5,000 and a 5% move on $5,000 is just $250.  

DMA CFD liquidity on the top 100 ASX stocks is solid The main key for not long term day traders is a quite a liquid market and unlike other derivative products like options, DMA CFDs mirror the liquidity of the underlying stock market. When trading utilizing a Direct Market Access (DMA) provider you can get access to and can notice the exact volume available on every stock at different levels of depth.  

Low commission rates for DMA CFD traders By far the hugest highlight for DMA CFD day traders rather low commission rates. In fact certain of the most well known DMA CFD outputs are the index DMA CFDs which are without any commission. This gives you access to a quickly moving product with ample liquidity for zero brokerage. Even if you are day trading the top 100 DMA CFDs, the brokerage is still too low. The great number of DMA CFD brokers in Australia charge a minimum of $10 or 0.1% and this makes the day traders quite happy.  

Day Traders preffer volatility which as been rather high recently. Volatility and DMA CFDs are the perfect pair. Day traders can’t allow sit there watching a stock run nowhere, they want movement and quick movement. When the markets are changeable, short term day traders are in their element and usually benefiting handsomely from the short sharp intraday movements.

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