We had a chat with Tradedirect365 CEO and professional trader Davin Clarke who has spent 14 yrs in the trenches, here’s what he had to say…
What sets Trade Direct 365 apart from the other Australian CFD brokers?
As a professional trader you work out what matters most to clients and what support is most needed.
Our client support and the trading infrastructure have been developed from real, experienced traders, not just coders and salespeople.
Your USP, is tight pricing, how tight do you think spreads can get and what do you think will happen when they mirror underlying bid/offers?
That is correct that we focus heavily on providing extremely low trading costs. This translates directly into better returns to clients and is a key factor in their profitability.
As an agile trading business we will continuously look to tighten our pricing. We are already at a stage where our spread on the Australian 200 CFD index is lower than what you can achieve trading the futures product and on top we don’t charge any commission.
What’s your background in financial services?
School was not my forte and after repeating year 11 twice, I thought I better get a job rather than doing it a 3rd time!
Essentially I am an outsider to the typical investment banking types although I have acquired the requirement levels to gain an Australian Financial Services License in Australia.
I became a professional trader the hard way by doing dumb things and then learning and improving my trading execution and management over a 14 year period.
After some hard learnt lessons I managed to get long term success earning my primary income though the trading skills I developed.
As Trade Direct 365 doesn’t provide news, research, or sentiment – what are your top three resources of trading information you’d suggest to your clients?
Market Prep is an essential process you need to undertake before beginning any trading activity.
1. In particular, you should determine if there are any key economic data or reports due, and any key trading dates such as options expiry.
2. Look for any company reporting dates of either positions you hold, plan to invest in, or for large companies that are likely to impact the sector you are investing in.
3. An analysis of the daily chart of the overall market to date to identify key trading zones including major and minor support and resistance areas, the current state of the market (ie trend or consolidation) and an assessment of the next likely direction for price movement.
Include in your analysis key price zones in which you expect to see trading activity based on your analysis.
What’s your typical client like? And what are their most popular traded markets?
Our clients are typically around the 35 to 65 year age group looking to place online trades in global markets from a single platform.
They tend to be more active than traditional broker clients, finding opportunities to act upon before the public and news sites catch up.
The index trade instruments such as the Australia 200, German 30, and the UK 100 are the most popular on our platforms.
Each client has a favorite though and many will trade equity CFDs and Forex with the ability to trade both long (up) and short (down) which you cannot do with a traditional broker.
What’s your view on welcome bonuses and rebate schemes for Australian traders?
We like to offer clients a way to further reduce their costs and at times offer welcome bonus rebates. This is dependent on the regulatory stance that can change from time to time.
We do not offer exorbitant rebates that are often merely headlines to capture attention but rather attainable amounts that reflect responsible trading.
How do you generally win business when clients are considering moving to TradeDirect 365 from an established broker like Pepperstone, Plus 500, IG or CMC?
The cost saving advantages are a key component but our support for clients is the primary focus. Try finding real traders to speak with at the companies mentioned in your question.
Clients regularly move from a competitor to us just on the back of the way our support team help them with their thorough understanding of the market instruments and the trading tools available to clients.
What’s been your biggest challenge to win new business, and in particular to keep it?
The biggest challenge for TradeDirect365 in winning new business is getting exposure to current traders as a better alternative to the industry giants.
Even though our charges are often 30% or more less, it’s hard to compete with the massive marketing expenditure of these firms and this means it takes time for clients to find us.
Once they do find us they will generally stick with us long term.
How popular is mobile trading at Trade Direct 365? Do you find that most people use mobile to keep an eye on the markets or are a large percentage of trades executed through mobile?
Each year we see more people use mobile for actual trade execution. We expect these figures to keep growing. Up until recently the mobile app was mainly used for just monitoring trade positions and market movement.
The mobile apps will get more advanced features to make trading easier and feature rich but there is something to be said for sheer screen space on multiple monitors.
What’s your top three tips for new clients looking to start CFD trading?
Tip 1 Use the stop loss function with every trade to manage downside risk. Losses must never blow out.
Tip 2 Trial the demo platform with our live prices to get used to the platform and risk management tools.
Tip 3 Don’t double/triple down on losses, especially with leverage. It can work but eventually a directional move will wipe out equity. This is how many traders suffer catastrophic losses.
What’s the most important lesson you’ve learnt throughout your career?
Early in my trading career I had made a good sum of money simply following the general market direction.
I started listening to doomsday prophesies and others opinions, changed my trading style and quickly lost most of my funds.
Luckily I realised that sticking to my own trade style and management was an edge that allowed me to get back on track and trade professionally.
What’s the biggest challenge you’ve faced in the Australian CFD market?
As a trader the challenge was to get enough liquidity on some of the trading instruments.
This is not such a problem with European and US markets but in Australia some mid and low cap stocks can develop large spreads making stop loss placement difficult.
Is there anything in the industry you simply couldn’t do without, an app, or service for example?
I find it imperative to use charts to review general market conditions and the instrument I’m trading.
Understanding market structure through charts is a key to developing timing techniques.
Price action moves in different cycles from expansion in price levels to a contraction in price levels.
My strategy is to enter trades with contracting price movement and look to sell once price movement expands away from equilibrium.
Fast trade execution on a quality, easy to use platform is the other key requirement I require.
Any finally, what are your future plans for Trade Direct 365?
Our plan is to keep delivering on trader help through knowledge and skills transfer as well as ongoing support.
We feel this differentiates us from sales focused competitors and builds long lasting client relationships.
As we continually develop new products and services the key goal is to give our clients the best chance of success through low cost and efficient systems.
Davin Clarke is the Founder & CEO of Tradedirect365, an Australian CFD broker
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.