I'm a Day Trader!

Well, my theory about using CMC Markets Contracts for Differences to trade my US Stock portfolio at lower cost than via my broker was a non-starter. When I picked a short list of 6 possible stocks to buy from the "magic formula" list, none of them were available to trade via CMC Markets. So it looks as if I'll stick to buying US stocks through my Comsec-Pershing broker account for $65 per trade. Some kind folk have suggested some US online brokers that will open accounts for non-US traders, but they all required funds transferred in advance of trading, and by wire transfer. Wire transfers cost $30 each time from my Australian bank, so it would cost half as much as the Comsec-Pershing brokerage fee just to transfer the funds for each monthly trade. I could save on the wire transfer fees by shifting a large chunk of cash into the US broker account, but as I'm borrowing the trading funds at around 8% pa interest this also would cost.

Anyhow, having opened the CMC Markets account and funded it with an initial A$1000 it was ready and waiting when DW suddenly decided that the AUD had gone too high vs the USD and wanted to know how she could short the Aussie dollar. I told her she could use my CFD trading account and I did an initial trade selling $100,000 AUD vs USD spot @0.8369, just as an experiment to confirm that currency movements were affecting the open position in the way I expected. So far the AUD went up 4 ticks, costing DW $35, then dropped back down to 0.8365, making her a $35 "paper profit". I'll watch the currency movement on the live chart for a while before closing the position before I go to bed. I'll then explain what happened to DW tomorrow and let her have a go at doing a trade. Personally I think this is just like gambling (which DW enjoys on a small scale), which I don't get any pleasure from. I think this is going to turn out to be a lose-lose situation. If DW makes some money from trading she'll probably think it's an easy way to "earn" some money while on maternity leave, and will be at risk of suddenly making a big loss. If she loses a little bit she'll probably lose interest in it after a while. Either way I don't think this day trading lark will finish with us making any profit.

Hopefully this "entertainment" won't end up costing too much...

Enough Wealth