Does anyone else do this? When placing a CFD order on your platform in the mornings, do you sit there waiting for the price to go up or down to get a better price? Sometimes for minutes, or even hours…?
Is this a good idea?
What do you think?
Well, it depends on your time vs return. If you have plenty of time to spend watching your CFD broker or provider’s price change and get a few cents better price, then you get positive slippage. The other benefit is that if the price is going in the wrong direction, then sometimes the CFD goes through your stop loss, saving you some commission on a losign trade.
The disadvantage is that 1. it takes a lot of time, and perhaps you can better use that time for something else, and 2. the CFD may be going up (if going long) and take off too fast or too much before you get in. This can reduce your profits as well as increase the risk in the trade as there’s a larger gap between your entry price and your stop loss, if your stops are based on a certain value, rather than a certain distance away from your entry.
Eg with IG Markets, you can place your initial stop away from your entry, with many other providers you can’t.
The pros and cons sometimes balance each other out, so is it worth it?
Well, you can test and measure and see for yourself.
