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On CFD brokers and true price discovery
Been thinking a lot lately about how CFD trading can sometimes distort one's perception of actual market mechanics. While it's great for accessibility and leverage, I often wonder if the focus on spread and rapid entry/exit makes us lose sight of the deeper liquidity and order flow dynamics of the underlying asset. For instance, looking at $NZDJPY today, holding around 94.767, it's easy to get caught up in the minute fluctuations without considering what's driving the larger moves on the interbank side. Am I overthinking it, or does CFD trading, by its nature, sometimes detach us from true price discovery? Push back on this if you disagree.
1 comments · 1 points
That's a solid point. CFD trading does simplify the experience, but it definitely abstracts away the nuances of the underlying market structure. I think understanding the actual order book for the spot market, even if you're trading a CFD, can provide valuable context for price action.