So I have around $1000. If I invested this, if I were good I could probably return $200-300 a year. Any expenses + fees would make the profits not worthwhile for the risk. And besides, most brokerages wouldn't even except that low amount. However, with CFD trading you start with a low cap that is highly leveraged. You pay a lot more fees BUT if you are able to do successful swing trades then you can aim for $200-300 a month. You take on a lot more risk + reward. Due to this excessive risk (and increased profits) I have decided to run a model portfolio for several months before officially starting to see if it is workable. It will also help in collecting much needed data to refine my forecasts. The Trading Thesis I will look for undervalued companies based on the margin of safety found by fundamental analysis and market sentiment. Market sentiment will be important since I am trying to minimize my trade time. A stop loss will be set to -1% (TBF) of initial price. Once asset is > intrinsic value a stop loss will be set = instrinsic value. Once a more appealing asset is found the original trade will be closed or trade will be closed depending on no. of days asset has been traded + systematic risk the position presents to portfolio. Dividends are irrelevant because the return of CFD = Change in Asset Price. Its a pretty simple thesis. But the hard part is finding the intrinsic value and calling the right time to sell the position. The KEY is to reduce the no. of days a trade takes. Expenses + Fees (and leveraging) Commission Rate is $10 to start a position (or 2 cents per share if you buy enough, which I wont). No fee to sell a position. The big big big big big cost is the holding cost overnight which is: (Units x opening trade price x holding rate buy) / 365 x CMC Markets currency conversion rate. per day. 1 Unit = 1 Share of X Asset Holding Rate Buy = 1 Month LIBOR + 2.5% (so I've placed an estimate of 0.8 (80%). So for my test model I will be doing the following equation: (Units x opening trade price x 0.85) / 365 for now. I need to try and get an accurate value for the currency conversion rate. I will be leveraging 20x for each position. Starting Out I will find the intrinsic value of a handful of shares. The larger the margin of safety (and less the systematic risk) the more capital will be allocated to the asset. I will post a new entry once I have started the first positions. The intrinsic value will have to be reached within a month or less time period which is the hard part. With the data I collect from this trial I will be accurately able to find profits and refine my current basic model. For each trade I may give some details as to why I have made the trade but I will not be sharing all my research and methods for calculating the intrinsic value of each asset. I will be focusing on NYSE & NASDAQ share prices. Thank you for reading the first of many more entries over the coming months. Feedback would be greatly appreciated.