CFD-contracts for the difference in the forex
Although foreign exchange trading, or Forex, may seem complicated at first, trading in currencies can actually
be a great way to diversify a portfolio quickly and easily. But what kinds of currencies can be traded?
The answer is almost all of them. However, a few are more popular than others, making them easier and faster trades.
Our platform allows you to:
CFD trading has increased in popularity over the last decade because they offer many key advantages:
Convenient global access
CFDs aren’t regulated like other exchanges, so CFD brokers can offer access to any global market across a single, simple platform.
No trading fees
Unlike other assets, you don’t need to pay any commission or stamp duty.
Variety of options
You can buy and sell stock CFDs, but there are also lots of other options. Index, currency, treasury, commodity, and even sector CFDs are available.
Unlike more restrictive markets, CFD trading isn’t exclusively completed during business hours.
You can significantly increase your portfolio’s potential by utilizing leverage when trading CFDs, up to 1:200.
How a CFD works
When you trade a CFD, you aren’t buying or selling a physical asset. You’re guessing on whether you believe the price for that asset is going to increase or decrease in the future. This is why the CFD market is much easier to access and fees are non-existent.
One difference you need to be aware of when trading CFDs is the spread. The spread is the difference between what you pay and the market value – and it will fluctuate a bit among each broker. If the spread is $1, for example, then your asset must appreciate $1 before it reaches the breakeven point, and then you will begin earning profits on any further gains.
Advantages of cryptocurrencies trading
Even though Cryptocurrency trading is fairly new, it does not differ from any other form of trading. Placing a position allows you to speculate on a future digital currency pair movement by investing a reasonably small amount of capital without the obligation of paying any fees to third parties. As opposed to traditional trading, there is no real need to physically exchange digital currencies.
Alternatively, what you are actually trading on is the price movements of your selected digital currency pair. Being one of the world-leading cryptocurrency trading brokers, we offer you the complete package when it comes to the safety, security and transparency of your online transactions. Some of the most important benefits you get to take advantage of when choosing our platform are:
Ideal investment opportunities
CFDs are perfect for investors who demand a bit of flexibility, which is one of the reasons they’re so popular. If you’re busy working during the day trading hours, for example, you might not have the ability to buy and sell stocks the way you’d like to.
For the investor who wants to stay organized, CFDs are also a great option. You’ll be able to do all your trading with a single broker and still have access to an enormous global market. You won’t run the risk of having to trade across several platforms and letting an opportunity slip past you.
Finally, CFDs are great for people who want to invest heavily in an expensive asset but don’t have the capital to do so. You can purchase more shares at a fraction of the cost and without any commission fees.
Trading CFD’s effectively
Like any trading market, you need a solid strategy to trade CFDs for a profit consistently. Here are some of the most common strategies employed by successful traders:
If you have long-term investments that you believe are due for a downward spell, shorting with CFDs could be a cheaper alternative to selling your shares and purchasing them again.
CFDs are the perfect market in which to make short trades because there aren’t any stamp duties and you can trade on a margin.
If you notice that one company is trading far less than it should be compared to another one, CFDs are a great way to exploit it. You can make a profit by using CFDs to short the overvalued company and go long on the undervalued one.
Setting a stop-loss
Setting a hard stop-loss is vital if you want to protect your capital as you trade CFDs. Trading on leverage magnifies your wins, but it accelerates your losses as well. You need to be careful about mitigating your risk and pulling the plug before losing a large chunk of your bankroll.
It’s important to remember that CFDs are a contract between the investor and the broker. You need to work with a broker that you know and trust. This is why you want to open an account here at Trade24. We offer incredible low spreads, personalized service, and trading systems held up to the highest standards.