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Thread: Trading CFDs (CFD)

  1. #1
    Super Moderator Gulfstream's Avatar
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    Trading CFDs (CFD)

    In addition to currency and metals trading,dealing centers offer us an interesting opportunity - trade in contracts fordifference (CFD) (Contract for Difference).
    What is CFD, CFD trading advantages anddisadvantages, the most popular CFD - the main issues of the topic.

    The topic will often be referred to the words"basic asset" and "derivative", so the meaning of theseconcepts:

    Basic Asset - having a valuation of an asset, which is supplied under the contractor the value of which is the basis for calculating the performance of thecontract.
    (For example, take the currency pair EURUSD:.Base - the euro price of the dollar Euro - the base currency, the dollar - thequote currency.)

    Derivative financial instrument (derivative) -agreement (contract) for the realization of the rights of its sides (orexecution of obligations) relating to the price of the basic asset, which is thebasis of the instrument, and lead to a positive or negative result for each ofthe parties.
    (For example, futures contract EURUSD: we donot buy Euro for dollars,sowe do not have Euro as cash, but if we bought futures onthe Euro, then after a while we get the financial result due to changes inthe value of the basic asset (in this case, the Euro will be BA) will grow -. you will have profit. At the same time we do not buy the European currency itself.

    CFD - it is also a instrument that allows youto get profit from changes in the price of the basic asset.
    Contract for Difference (CFD) - the contractbetween us and the broker on the price of the basic asset.

    The purpose CFD conclusion - getting thedifference between the contract price at the opening position and the price ofthe contract at the closing position. CFD price is linked to the price of thebasic asset, but the physical delivery of the basic asset does notoccur.

    Interestingly, the number of CFD is not linked to theamount of the basic asset, and CFD on shares of any issuer may be many times bigger than thenumber of shares of the issuer in circulation. Basically, CFD - this is abet on the price of an asset between the client and the broker.
    As the basic asset can actstocks, stock indices, bonds, currencies.
    In this theme we consider CFD on stocks andstock indices.

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  2. #21
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    trading with CFD is good and profitable and the trader can make good money with it if he has the ability to trade with them, CFD is good for the experienced traders but the beginners may be unable to trade with it and get good results and so the trader should practice with them first to be able to find it is suitable for his trading or not.

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  3. #22
    Trader Killer_Queen's Avatar
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    i have never been trading any cfds so far in my entire trading career because the first thing i learned and traded was only forex. not even metals like gold or silver, i do not think this cfd has better movement compared to forex market. but i guess i should give it a try because i will never know before i test it on my own first. a beginner like me is really helpful with this explanation, thank you.

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  4. #23
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    Trading the CFD is totally new to me as i have never heard about it before now and i am just wiling to learn a little more about it, before now,i have concentrated all my attention on the forex market , but now i am taking time to learn about the Binary option and i find it very interesting because it is much more similar to the forex market and you can make good money from it if you have the knowledge about the forex market and you can make some good prediction about the market. I do not want my attention to be divided for now.

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  5. #24
    Trader layigold's Avatar
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    At times when I do not see any good set up to trade on currency pairs, I do venture into CFD perhaps I can get good trading opportunity but there is need for one to study and learn how market runs in contract for differences. Unlike the currency pairs whose market runs non stop , instruments on CFD have the opening and closing time and most of the times they experience serious gap when the market opens for them and this may adversely affect traders who are not too familiar with trading these types of financial instruments.

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  6. #25
    Trader Silhouette's Avatar
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    Quote Originally Posted by layigold View Post
    At times when I do not see any good set up to trade on currency pairs, I do venture into CFD perhaps I can get good trading opportunity but there is need for one to study and learn how market runs in contract for differences. Unlike the currency pairs whose market runs non stop , instruments on CFD have the opening and closing time and most of the times they experience serious gap when the market opens for them and this may adversely affect traders who are not too familiar with trading these types of financial instruments.
    Not really a good idea to trade with CFD's to those who got small amount of deposits because we might lose more money beyond our stops when market open for next day in gap, that's right. Risk and money management plays big role in this part of business and not suggested for traders who lack of money and can't analyze market properly. Only good traders who able to trade in long term could survive and earn plenty profit with CFD trading.

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    rules made to be followed, not to be broken

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