Analysis and Trade Preparation · CFDs Trading Guide

A trade thesis is a claim that can be tested and rejected. Write it before looking at the maximum size available on the order ticket.

State the claim precisely

Replace a vague statement such as the market looks strong with a conditional idea. For example, a hypothetical index trend may remain intact while a defined support area holds and earnings expectations remain stable. Name the observations supporting the claim and explain which evidence would contradict it. A useful thesis can be wrong without being rewritten after the event.

Separate the market idea from the vehicle

The underlying may behave as expected while the CFD performs poorly after funding or execution. Specify why this contract fits the time horizon and exposure. Read its spread, financing, point value and event rules. If a direct holding or simply waiting better fits the objective, the existence of a CFD does not create a reason to trade it.

Build alternative scenarios

Suppose the research case anticipates a 60 point rise within ten sessions. Also model a sideways outcome with funding costs and a 40 point adverse gap. A target is not a probability estimate. Record the entry condition, invalidation level, review date and expected costs for each scenario rather than focusing only on the favourable path.

Define the decision before the outcome

A complete preparation record states the maximum planned exposure, acceptable execution deviation and conditions for cancelling the order. It also specifies what happens if the catalyst is delayed. This makes later review about whether the process was followed, rather than whether a lucky price move produced a profit.

Try it yourself

A planned price gain is $180 and expected total costs are $35. A delayed scenario adds $20 of funding. What are the two net results, assuming the same eventual price gain?

Show the worked answer

The original net estimate is $145. The delayed case falls to $125. Identical direction and price movement can produce different outcomes because time changes the costs.

Further reading

Educational material, not a recommendation to trade. Numerical examples are hypothetical. CFDs involve leverage and substantial risk of loss. Availability, costs and protections depend on the contract, legal entity, jurisdiction and client classification.

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