There's a lot of confusion about what Contracts For Difference are and what they are not.
CFDs offer their benefits and they have the disadvantages but it's important to understand them. #cfds#invest cfdspy.com
CFDs are often confused with options.
First of all options and binary options are two very different things, it's important to know the difference.
As for the CFDs vs options - cfdspy.com/guide/cfds-vs-…
What about share trading and contracts for difference? There's no simple answer there and thus one has not understand the difference.
Remember, CFDs have overnight financing charges.
Regulation. Make sure your CFD broker is regulated by some prominent regulator such as FCA (UK), ASIC (Australia), Cysec (Cyprus), or FSB (South Africa), your CFD provider should be regulated by at least one of those regulators.
Avoid unregulated brokers at all costs.
Range of markets. With so many CFD trading companies, you are spoiled with choices and have the right to go for a broker which offers all the financial markets you want to trade but remember, just because a brokerage offers over 10k markets doesn't mean it's the best. #brokerage
When it comes to financial markets and CFD trading, it makes you wonder how some traders manage to consistently make profit while so many around fail miserably.
This thread looks into what successful CFD traders have in common. #CFD#investing#stockmarket cfdspy.com/guide/who-trad…
Successful traders tend to specialise and know their traded markets upside down, just think of hedge funds, each fund specialises in 1 particular market and thoroughly researches it.
Know your market #market#cfdtrader#trader cfdspy.com/markets/range-…
Manage the risk. CFDs and other leveraged products are very risky and thus should be treated as such. Never underestimate the risks and tread with caution. Risk management should be high on your agenda if you want to consistently make money on the financial markets.
We keep talking about the benefits of Contracts For Difference (CFDs) but barely ever mention the risks associated with them.
So we decided to correct the mistake and answer 3 questions in this thread: 1. Is leverage good? 2. Are CFDs risky? 3. Can I easily make money with CFDs?
Is leverage good?
You will read on many websites that leverage is a double edged sword. It means it can bring you good profits and CAUSE BIG LOSSES.
You have to make sure you keep the leverage in check and learn how to use it to your advantage. #CFD cfdspy.com/leverage/cfd-l…
Are CFDs risky?
A simple answer is YES. CFD trading is risky.
If you want to see the proof then visit any CFD broker and you'll see that on average over 70% of accounts lose money. Thus more traders lose money than gain. #cfdbroker#investing cfdspy.com/cfd-brokers/
CFD trading offers a range of benefits and there's a reason why it's become so popular among retail traders.
But... there are also disadvantages and costs associated with CFDs and in this thread we will see how CFD brokers make money (the charges). #CFD cfdspy.com/cfd-brokers/
1. The first cost in incurred by the long term traders and it's the overnight financing. This is the the cost a trader has to pay every night for holding his/her position (it's usually around base currency borrowing rate + 2%). cfdspy.com/leverage/finan…
2. The spread. The spread is the difference between ask and bid prices or the difference between the prices you pay to buy and sell your market instrument.
Traders incur this cost with every single CFD trade they make.
As most would guess, CFD trading started in the City of London in the early 1990's as a type of margined equity swaps. At first, they were only available to institutional traders and investors such as hedge funds.
Leverage and no UK stamp duty made it happen.
Late 1990's and Contracts For Difference were finally introduced to the retail traders, first in the UK and in early 2000's to all retail traders around the world.
Once again the leverage played a vital role in growing popularity. #Leverage#CFD cfdspy.com/leverage/cfd-l…
CFD and trading is never easy and requires a lot of discipline and time dedicated to be a successful trader. What is the difference between a gambler and a real and successful CFD and forex trader? #forex#cfd#trading#success
It is vital but equally difficult to keep your emotions in check but emotions can cloud your judgement and you can rush into spontaneous and irrational decision; whether it's a CFD trading entry or closing your positions at the wrong time. cfdspy.com/tips/emotions/
Discipline plays an important role in CFD trading as well. Once you've chosen your strategies and trading signals (if you use any), make sure you stick to the plan and discipline yourself to follow the plan to the end. #discipline#tradingpsychology cfdspy.com/tips/disciplin…
What makes Contracts For Difference so special? Why are they so popular?
Let's see what makes CFD trading so different.
CFD trading is not for everybody and should be treated with care as it's leveraged product. cfdspy.com #CFD#trading#stocks#forex
Leverage: CFDs are a leveraged product and thus should be treated as a risky instrument. Treat leverage with respect and it will respect you. Never over-leverage and keep your trades under control.
Markets: Reputable CFD brokers offer a wide range of markets covering stocks, forex, commodities, indices, bonds and interest rates, crypto, and many more.
Make sure you learn the market you want to trade, just because you can trade, it doesn't mean you have to trade.
CFD trading can be the easiest way to trade the markets. It remains an essential weapon for a savvy and professional investor if used with the right strategies. CFD strategies are divided into three types, they can be used depending on what suits you best. cfdspy.com/strategies/cfd…
1. Short-term strategy or scalping: as the name suggests, it is a very short-term method that involves a very quick trades in order to clear as quickly as possible. This strategy is considered to be the most stressful and time consuming. cfdspy.com/strategies/sca…
2. Then there is-strategy that is still called "day trading". It is a strategy where all trades are executed within one day. The duration is longer and it will be possible for the traders to take the time to properly analyse the markets. This will reduce stress and risk.
Demo accounts provide access to all the features that a live account
does, other than the ability to trade real money. You can execute
orders, get used to setting stop losses and limit orders, research
individual assets using charts to help with you decisions
and much more.
What strategy should I Use?
When trading on a demo account, it is best to use exactly the
strategy you would if you were trading real cash. There is not part in
opening unrealistic contracts as they will not reflect what would happen
in real life. cfdspy.com/strategies/cfd…
What Companies offer Demo Accounts?
You will find that the majority of CFD brokers offer demo accounts.
We would advise you to register with a number of different providers to
get a feel for their offering and to compare the features on offer.
As with any financial service in life, you will find high
numbers of competition and to the novice it can be difficult to decide which
one to use. Well the same goes with the world of CFD Brokers where you
will find an ever increasing number cfdspy.com
The speed and quality of their trading platform. Most
trading platforms these days tend to be web based. In years gone by you
had to download software and place trades through it which led to
incompatibility issues among other things.
This is perhaps the most important factor – especially for
those of you that are looking to bet long term and open a high number of
positions. The spread is the difference between the buy and the sell
price and is how the spread betting firms makes its money.
In this thread we will quickly revisit how CFDs are different from other trading instruments and see why and how Contracts For Difference became so popular amongst retail traders and investors. #cfd#investing#forex cfdspy.com
1. CFDs vs Financial Spread Betting: the main difference between these two is that spread betting is CGT-free; thus you don't need to pay tax on any profit you make, at the same time your losses can't be offset against future gains.
CFDs vs Futures: in this case both look similar and you can actually trade both futures and CFDs with your broker.
An important difference is that futures have an expiry date while CFDs don't, on the other hand futures don't carry overnight financing cost. cfdspy.com/guide/cfds-vs-…
Trading CFDs can bring investors great rewards, but it can also carry
substantial risk. The key to maximizing the rewards while minimizing the
risks is to be smart about your investments, and follow some solid
strategies and rules. cfdspy.com
No matter how much you think a certain position is going to be a “sure thing,”
don’t put a sizable amount of your trading capital into a single trade.
If you put 50 percent of your capital on one trade, you’re not making a
smart investment – you’re just gambling.
Making investment decisions based on a gut feeling, or an emotional
reaction to a certain company or event, is not a smart way to operate.
It is much wiser to make your investment decisions based on a thorough
analysis of the facts and trends.
In this this CFD trading guide for beginners, we will have a look at the main characteristics of the Contracts For Difference.
Here we will show what makes CFDs the perfect instrument for traders all around the world. cfdspy.com #forex#CFD#cfdtrading#forextrader
1. Leverage offers a great advantage for retail trader but it comes with its own benefits and risks. Leverage "technically" allows you to borrow money from your broker and thus you don't need to pay 100% value of the underlying instrument. cfdspy.com/leverage/cfd-l…
2. Range of market. With CFDs, you can "virtually" trade anything, you name it, but the most common products are: stocks (shares), forex, commodities, indices, and cryptocurrencies. cfdspy.com/markets/range-…