The trading world is not a constant system. A lot happens during the process of buying and selling. Trading using CFDs is one such factor that might seem a little out-of-the-box but will surely help you gain more leverage with the trading insights provided.
But what is it exactly? Well, a CFD means Contract For Difference. Does that make any sense to you? No? Don’t worry! There’s a lot about CFD that’s still hidden under the covers. Let’s help you get started with this incredible trading technique right here.
Let’s Start With Basics
It is an agreement between two groups where the buyer is expected to pay the difference in amount (between the current asset value and what it was when you signed the contract) to the seller. Ideally, it’s the difference between the opening and closing price.
Technically, you don’t own any stock. Instead, you leverage the change in prices. So, if the market is constant, it would seem like a “no profit, no loss” scenario. Now that you know about this, the next step is finding the best platform to get started.
Here are the top three CFD brokers that you can choose to start your CFD trading journey.
EToro
This is one of the largest CFD platforms that’s trusted by millions of people. This platform is regulated by FCA and CySEC authorities. You can quickly check the credibility of the trading partner with its online reviews portal.
You can trade currencies, commodities, or other items using one portfolio. This is the best cfd trading platform that will enable you to protect your investments with its incredible risk management features, such as real-time alerts or customization strategies. This is a key trading insight to be aware of!
XM Broker
This platform also has been around for years, and due to its immense popularity and reliability, it has reached millions of users. This platform is like the golden goose of the CFD and forex trading. You can trade on stock indices, metals, and even energies from the same account. Hence, making this multi-asset platform quite popular amongst the traders of today.
IG
It is often referred to as the leader of the CFD trading platforms. With it, you get access to different platforms, such as MetaTrader 4, mobile trading applications, website-applications, and others. Millions of brokers trust this platform since it is strictly located by UKFCA, US CFTC, NFA, MAS, and others.
But,
Is CFD Beneficial Over The Other Options Available?
Honestly, you will gain access to many benefits if you start using CFDs as a part of your trading strategy. What are they? Let’s find out!
They are quite profitable since they provide high leverage.
CFD brokerage comes with low or no commissions compared to conventional brokerage.
When it comes to trading, active traders can only trade a limited number of times. Also, they must have a certain amount in their account to be labeled as a day trader. There are no such boundations when it comes to the CFD market.
CFDs provide you the benefit of betting against any product that can be bound under a contract. In other words, you can take part in shortings when using CFDs.
Wrapping up
Contract for difference is an advanced trading agreement where the trader does not actually possess any asset. Instead, they receive the revenue based on the change in the price of the asset. This is why experienced traders often use this.
So, with these trading insights you should be ready to get going. Did you start your trading yet?
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