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What CFD Is And How To Get Started

The world of trading has often been one shrouded in mystery – an exclusive club with membership only available to the highest bidder.  Stocks, indices, trade values, margins, commodities – all terms once deemed foreign to the common man and considered the domain of all those big shots on Wall Street – are now becoming accessible knowledge, maybe eventually even common knowledge. Time and technology are two concepts that are practically married to each other.

Time creates technology and technology in turn defines time.

The technology that’s sure to define our time and our era is the internet.  Don’t be surprised if B.C. and A.D. come to be replaced by B.I. and A.I. – Before The Internet and After The Internet.

This is the degree of the technological significance of the world-wide-web and how it has become the foundation of almost all commerce and entertainment that we endeavor to do, and it’s only proliferating.

Part and parcel of the net’s spread has been the introduction and acceptance of online trading as a valid means of possibly accruing profit. CFD’s (Contract for Difference) trading equips you with the ability to seek out live opportunities across indices and commodities and more.

This type of trading not only opens you up to thousands of markets, it also doesn’t demand exorbitant amounts of cash to get started.

Start with a demo account

If online trading is something that appeals to you, then you’ll be pleased to know that I find this guide on CDF trading useful.

Of the many advantages available when it come to CFD trading, would be the fact that most reputable and thus regulated online trading platforms provide demo accounts.  While I would advise that you read all available literature on the topic as your first port of call; if you’re keen to get the party started, then I would highly recommend that you start with a demo account.

This will allow you the freedom to trade without the risk of losing any actual money. Best of all, there’s no allotted time with regards to how long you can make use of a demo account. It’s literally a case of trading until you feel confident enough to use your own money.

How to place a CDF trade

Once you’re ready to embark on your journey into the world of CDF trading, you’ll find that the process itself is comprised of 5 key steps, and they are as follows:

  • Choosing a market: Choose a market that interests you and if necessary, make use of the trading platform’s helpful technical analysis portal.
  • Opt between buying or selling: Click to either buy or sell. By electing to ‘buy’, you’re opting to believe that the market will increase in value. By choosing to ‘sell’, you’re foreseeing that the market’s value will fall.
  • Choose the size of your trade: Decide upon how many CDF’s you’d like to trade. 1 CDF equates 1 physical share in equity trades.
  • The use of a stop loss: Should you suspect that the trade you’ve elected is veering against your bet, then by adding a stop loss, you can close out at a certain position and not suffer a significant loss.
  • Observing and closing your trade: Once you’ve placed a trade, you’ll be able to observe its performance in real-time and thus it’s rise or fall. Based on your expectations, you can choose to exit the trade by clicking on what is known as the ‘close trade’ button.

What I’ve discussed with you here today is but a cursory glance of CDF Trading. Many online trading portals also offer traders automated bots and software to assist with the process.

Outside of reading up on all applicable literature and making use of a demo account, automated software is also a very effective way to potentially profit from over 4000 thousand available markets.