Education
How to Trade CFDs
Learn the Ins and Outs of Trading CFDs
A contract for difference (CFD) allows individuals to speculate on the price movements of various financial markets, such as forex, equity indices, commodities, and shares.
What Exactly is a CFD?
Understanding the Basics of CFDs
CFDs, also known as derivatives, allow traders to gain market exposure without owning the underlying asset
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Understanding the Basics of CFDs
CFDs also provide an opportunity to express your opinion on the future direction of a market. Essentially, you are making an agreement with us to trade the value of an instrument based on its opening price and the price at which you decide to close the trade in the future.
One of the Most Versatile Trading Options
Global Market Access with CFDs
CFDs provide you with the opportunity to trade global markets in both bullish and bearish conditions, allowing you to take advantage of both upward and downward movements.
Flexibility of Cash-Based CFD Trades
Unlike other financial instruments, cash-based CFD trades do not have an expiry date.
What Exactly is Leverage?
Leverage and Market Exposure
When trading CFDs, you’ll need to allocate a portion of the total market value of the position as its exposure. With a small initial capital outlay, you can gain significant market exposure through margin or deposit.
The Benefits and Risks of Leverage
Understanding leverage allows you to make your capital work harder, but it’s important to be aware of the potential for greater fluctuations in your portfolio’s profitability.
Higher Risk with Leverage
However, it’s important to note that CFD trading carries a higher level of risk due to the use of leverage, which means there is a possibility of incurring significant losses beyond your initial investment.
Trading Expenses
Understanding the Costs of CFD Trading
The cost of trading CFDs with us varies based on your selected account type.
The spread, or the difference between the buy and sell price
It’s important to take into account any additional commission charges when comparing accounts.
An interest charge/rollover
Calculated based on the corresponding swap rate. Many traders holding significant positions often close out before this time, which can be a crucial consideration.
Timeless Qualities Exhibited by a CFD Trader
Traits of Successful CFD Traders
Successful CFD traders come from various backgrounds and possess unique qualities. They are driven, enthusiastic about financial markets, and always eager to expand their knowledge.
Risk Appetite and Management
Our clients typically have a greater appetite for risk and are aware that using leverage can amplify both gains and losses. A successful trader understands the importance of effectively managing risk.
Preference for Shorter Duration Trades
Given the significant leverage involved, CFD traders often prefer to hold positions for shorter durations, necessitating closer monitoring of their positions and portfolio.
Managing Risk
Importance of Risk Management in CFD Trading
Utilizing Stop-Loss Orders and Webinars
To ensure success in CFD trading, it is crucial to prioritise risk management. We suggest taking advantage of our extensive collection of webinars that focus on managing risk.
Explore Further with a Demo Account
Test Your Strategy with a Demo Account
Opening a demo account allows you to assess if CFD trading aligns with your goals and refine your trading strategy.
Are You Prepared to Engage in Trading?
Getting Started with CFD Trading
Getting started is a breeze. Apply quickly and easily with our streamlined application process.
