How to trade CFD

How to trade CFD

It means “Contract for difference”. In trading it is an innovative money tool that let you earn money from change of prices in indexes, exchange goods, equities without the need of buying them. Talking differently, it calculates inequality of trade entering (opening) and exiting (closing).

CFDs in trading

Now traders use this tool more often since they want to invest as little money as possible.

They give agents a chance to take part in business that some time ago was closed for them because of expensive down payment or law regulations.

This type of trading gives traders a chance to do very or not very risky businesses. This tool is the best web stock market. It gives people an opportunity to escape direct use of stocks. Web stocks' trading is always considered to have obstacles. But the option trading can help you to overcome these obstacles.

Stock brokers offer a small variety of investment instruments. However, use of the mentioned tool in trading will give you a chance to deal with currencies, cryptocurrencies and options within your territory bounds. Thanks to cryptocurrencies, online stock trades have become less difficult and, consequently, more comfortable and effective.

Position value and position margin
Position value and position margin

Main aim 

The main aim of the instrument lies in satisfaction of customers' needs having а relatively small sum of fist investment but wanting to make profit in capital-intensive markets.

For instance, to sell Google stocks with the amount of $ 150,000, the trader's account need to have $ 15,000 of free money sources. If profit of $1000, the revenue on the transaction would be 10% in stocks' trading and 100% in this instruments' trading. 

Trading process description

  1. Push the button “Open new cost” situated at the display top. After that choose «CFD» from the list of available options. Then decide what organization you would like to work with. Check the prices diagram with the help of technical research tools. And do not forget about main factors. At last decide on the way of trend movement and suppose how it can behave in foreseeable future.
  2. Choose the sum of money you want to pump into this very transaction. Remember that, according to fundamental procedures of dangers management, you should not pump all your money into one transaction.
  3. Decide on multiplier. It can be x3, x5 or x10. After doing that, close the session automatically. The multiplier will help to increase both capacity of earnings, and risks. After opening transaction at the sum of 100 dollars using x5 multiplier, you will get the same results, as if you had invested 500 dollars. It is the subject of both profit and losses. The mentioned way of closing will give you a chance to immediately close transaction, take earnings or minimize losses.
IQ Option open position
IQ Option open position
Standart Bank
The financial services provided by this website carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose