Category: CFD FOREX BROKERS
CFD Forex Trading:
A CFD-Contract for Difference is a special type of contract which allows traders to earn money on the rise or fall of the price of a stock, commodity, etc without buying that stock or commodity. In other words it is an agreement between two parties to exchange the difference between the opening price It is a great way to do stock trading and is supported by many Meta Trader 4 Forex Brokers. For e.g if you want to buy stocks in Apple of $1000 you will have to deposit $100 for this trade.
You can use CFDs to speculate on the future movement of market prices regardless of whether the underlying markets are rising or falling. You can go short (sell), allowing you to profit from falling prices, or hedge your portfolio to offset any potential loss in value of your physical investments. This means that you can earn profit either market value goes up or down.
One of the other benefits of trading CFD is that it offer traders an opportunity to trade in different markets which help traders to diversify their trading portfolio. CFDs have no fixed lot requirements neither they require the trader to own the underlying equity index or commodity. Unlike many other financial instrument, CFDs are traded over-the-counter rather than on an exchange which means that CFDs can be traded outside of regular exchange hours which helps the investor to have control over when a position is closed. If you have some experience of trading in Forex, CFDs functions are much similar.