Start CFD Trading Today – Guide How To Begin To Trade CFDs

A CFD (or Contract for Difference) is a well known and popular way of trading. It allows the investor to speculate on the falling or rising prices of instruments like indices, shares, currencies, treasuries and commodities. In this article we look at the basics of CFD trading, how it works and how to start trading CFDs.

What is a Contract for Difference? – CFD Trading Explained

A CFD is, in essence, an agreement or contract between a broker and client to exchange the difference between an underlying asset’s opening and closing prices. These derivative products enable the investor to trade on the price movements of the live market without owning the instrument that the contract is based on. CFDs can be used to speculate on future market price movements, whether they are falling or rising. Traders can either sell (go short) which allows them to profit from a fall in price, or hedge their portfolio in order to offset potential losses in the value of their investments. There are more than 10,000 markets available for investors who wish to trade CFDs, with prices being offered on indices, commodities, shares and currencies. Many of the best brokers, like XTrade, now offer the possibility of CFD trading to their clients, and you can find out more about the services that this broker provides in this XTrade review.

Introduction to CFD Trading: How Does CFD Trading Work?

When a trader participates in CFD trading, they neither sell nor buy their chosen underlying asset. Instead, they sell or purchase a number of units for their chosen instrument depending on whether they believe the price will fall or rise. For each point that the instrument’s price moves in the investor’s favour, the trader gains multiples of the amount of CFD units they have purchased or sold. Conversely, for each point that the price of the instrument moves against them, they suffer a loss, with the possibility of the loss exceeding their deposit.

What are the Costs of CFD Trading?

When participating in CFD trading, the investor has to pay the difference between the purchase and sale price i.e. the spread. The investor uses the quoted Buy price to enter a Buy trade and exits using the Sell price. The less difference there is between the two, the price has to move less in the investor’s favour before they generate a profit, or a loss, should the price move against them. There are also holding costs to pay. At 17:00 EST, any open positions are usually subject to a holding cost charge which may be negative or positive depending on the position’s direction and the holding rate applied. In order to view the broker’s price data or trade in CFDs, a Market Data fee is also often charged, and a broker’s commission is also sometimes applied.

The Advantages

There are several advantages to opting for CFD trading. These include:

Higher Leverage
CFDs offer a higher level of leverage than other forms of trading, starting at as low a margin requirement as 2% right up to as much as 20%. A lower margin requirement results in the investor having to outlay less capital and enjoying larger potential returns, however it can also result in higher losses.

Access to the Global Market From a Single Platform
The majority of CFD brokers offer a choice of products across all of the major global markets, allowing investors to make trades on any market that they choose from the broker’s own trading platform.

No Short Selling Rules
While some markets have rules that place restrictions or limitations on short selling, CFD trading generally has no rules of this type. Instruments may be shorted without any shorting or borrowing cost as the trader does not actually own the asset.

No Fees
It is rare for fees to be charged on trading CFDs and many brokers charge no commissions on entering or exiting a CFD trade.

No Day Trading Requirement
Whereas some markets require a minimum amount of capital in order to day trade or limit the amount of day trading for certain account holders, there are no such restrictions on the CFD market

Variety
There are many types of CFDs available for trading including stocks, indices, treasuries, currencies, sectors and commodities.

24 Hour Dealing
CFD traders can access their account 24/7, trading wherever and whenever they choose, even if the underlying market is currently closed.

No Stamp Duty to Pay
Since CFDs are derivatives and the trader does not own the instrument, there is no need to pay stamp duty, allowing the investor a saving of 0.5% on each trade’s value.

Start Trading CFDs

According to the Financial Times newspaper, almost 100,000 investors in the UK participate in CFD trading and this goes to show just how popular this form of investment has become. It is easy to start trading CFDs. The first step is to open an account with a broker that offers this form of trading. It is simple to register for an account online, complete the verification process and then deposit funds into the new trading account, depositing at least the minimum required amount. Funds can usually be transferred via several methods including credit or debit cards, bank wire transfers or e-Wallets. Once the account is in credit, the trader can then access the broker’s trading platform which enables them to begin trading CFDs by choosing a market and selecting how much to invest. Trading can be done 24 hours a day, 7 days a week, and often brokers will offer a downloadable app which can be accessed from smartphones or mobile devices to allow for trading CFDs on the go.

High and Low-risk Investment Strategies: Which is Right for you?

canstockphoto9358088While there are numerous theoretical and technical elements associated with investment, the make-up of your portfolio will depend largely on your own philosophy as an individual. More specifically, it will hinge on your appetite for risk, and the balance that you want to strike between minimizing loss and pursuing optimal gains.

To this end, there are a host of low and high-risk investment strategies available to modern investors, as new assets and derivatives are launched on the financial market on a regular basis. Your task is to determine which is right for you, based on your outlook and the prevailing economic climate.

What are the Most Common, High-risk Investment Strategies?

If you have a healthy appetite for risk, you are likely to pursue investment strategies that promise marginal and optimal financial returns. The best example of this is currency trading in the forex market, as this is represents an option where investors are not encumbered with the burden of ownership. As a result, their returns are marginal, meaning that they can either lose or earn far more than their original investment.

The key with this type of strategy and derivative is to identify methods of lowering the initial level of risk, and this can achieved by determining how you want to trade currency. Options such as “spreadbetting” enable you to simplify the process of currency trading, for example, by speculating as to whether your preferred currency pair will decline or prosper within a specified period of time. This not only enables you to make a simple and informed decision, but it also enables you to generate income in a depreciating market.

So while the risk profile of currency as a derivative does not change, as an investor you can take strategic steps to minimizing loss and optimizing your returns over time.

What are the Most Common, Low-risk Investment Strategies?

In an ideal world, all traders would be able to pursue low-risk investment strategies that deliver high returns. The issues is that such investment vehicles are hard to find, as while the type of margin-based derivatives discussed earlier offer typically high returns they are usually vulnerable to volatile market conditions and sudden price movements. This is the type of trade-off that creates a precarious balance between risk and reward, although it is interesting to note that there are at least some lower-risk investment options that can drive consistent and significant returns.

One of the best examples is a preferred stock, which is a hybrid security that combines the best of traditional stocks and bonds. More specifically, it is traded like a stock option on the financial market, but it acts like a bond and offers a stated dividend that is typically 2% higher CD’s or treasuries. This creates a unique balance of reward and risk management, and it represents an excellent vehicle for risk-averse or novice investors.

Dividend investment options offer similar peace of mind, as they deal in blue-chip stocks (such as Coca-Cola) that have showcased consistent growth over a period of years. They therefore deliver consistent returns, and offer the type of security and financial reward that defines any popular, low-risk investment option.

The Bottom Line: Which Option is Right for you?

It is pivotal that you base your investment strategy on an underlying philosophy and your appetite for risk, as this ensures that you are comfortable and able to make informed trading decision. Of course, the ideal scenario is to create a diverse portfolio of options that includes both high and low-risk investment assets, as this should create a delicate balance between risk and reward. Such an approach also enables you to profit in variable market conditions, which is crucial if you are hoping to earn consistent gains.

 

Basic Ideas For Those New to Finance

canstockphoto2004112VTA Publication Limited is a company that provides distant learning courses. They also organize events that cater for specific genres. The firm was launched in 2012. It has many clients all over the world. The mission of the company is to provide their customers with cutting-edge information, both digitally and physically, with a specialty in finance and economics. The company has been of great help to first time investors through the seminars it organizes with experienced investors. During the workshops, the first time investors learn about investment trends, investment tips, and things to avoid when they begin their investment journey.
Many first time investors fail because they fail to adhere to the basic principles of investing. However, investors who follow sound investment tips are bound for success in the long-run. It is important that first time investors understand that investing is a long-term commitment that requires patience and dedication. The funds that are put into any investment portfolio will begin to yield returns after a couple of years. Therefore, first time investors need to be ready to part with the money for an extended period of time. Their patience eventually pays off.
It is advisable for the first time investors to expect surprises. Nothing is ever given on a silver platter in the stock market. Share investments are more volatile than cash investments. The first big positive surprise from the company is likely to be the last, and the same goes for negative surprises. First time investors should know that investing comes with risks. The magnitude of the risk involved depends on the type of assets that a person chooses to invest their funds. Potential investors ought to remember that risky investments usually yield the most gain in the long-run.
First time investors are advised to invest as much as they can afford. Most experts recommend that potential investors should invest a portion of their income that they are willing to forgo without any significant negative impact on their daily activities. This tip is useful because it helps the first time investors to be financially disciplined.
First time investors need to conduct extensive research on the investment portfolio they want to invest their money. They will be able to gain knowledge about the past and current market trends. Therefore, they will be able to make healthy choices when they finally decide to invest. Moreover, they should also seek professional advice from successful investors. Besides, they can learn a lot from the experience of seasoned investors or an investment advisor. First time investors should also desist from following the crowd because they are not always right. They should follow what seems right to them.

Binary Mate review

canstockphoto12385283A lot of traders contacted us with a request to create the Binary Mate review, since this binary options brokerage company continues to draw everybody’s attention to its offers. So today we’re accomplishing this task to bring you as much useful information about this broker as possible.

 

Basic Facts About the Trading Platform

 

The trading platform offered by this broker was created under the quality control of some successful traders. These experienced young professionals were eager to share some knowledge they’ve gained during their numerous trading sessions. That’s why the platform could surely be considered as a new generation trading digital device. It could be switched in manual (for experienced traders only!) or in automated mode (suits to average beginner). Why do we recommend automated mode for the beginners? Let’s say, the support from a trading robot or a personal financial assistant could be very useful for the newcomers in the beginning of their trading campaign.

The innovative platform available in mobile application version as well has some unusual features which makes it rather unique. For example, an interactive live chat with a support team representative. It’s called Video Assistance and it’s something really remarkable. This video guide helps traders to make their first steps in managing the platform much quicker than all this old-fashioned FAQs or endless instruction pages do.
By using this video assistance integrated into the platform itself, traders have a possibility to communicate with customer support managers directly. Video Assistance option is available 24/7.

Broker’s Strong Points:

So let’s list all the prominent features of this platform:

 

  • Video Assistance. This live chat provides you with a high-quality video stream directly from a location where the customer service team operates. The answers are prompt, quick and exhaustive.
  • Risk Free Trades: It’s just a great way to start trading if you’re a beginner. Broker will cover up all your possible losses, but the profit you gain is still yours.
  • Quick Withdrawals. All the withdrawal requests are processed within an hour.
  • A Wide Range of Payment Methods. You can fund your account or withdraw the earnings using your credit card, Wire Transfer, American Express, etc.
  • Available Demo Account. A wonderful practice in trading with virtual funds.
  • Impressively High Payouts. Trader can get up to 90% payouts.
  • Three Account Types. Bronze, Silver and Gold accounts have different requirements and benefits, accordingly.

 

Conclusion

The final conclusion of this Binarymate review is also based on the analysis of signal accuracy this broker generates. Our verdict sounds this way: Binarymate is a reliable safe binary options broker. Usually its users receive the signals quicker than others and, as a result, place the winning trades. We conclude that these signals are trustworthy because of their high accuracy rate.
Besides, this platform provides traders with some really innovative features making their trading experience as comfortable as it should be.
Well, no wonder this broker is already so popular among the traders despite of being one of the newest in the industry.

Everything You Need to Know About Spread Betting

canstockphoto27905600During the past decade, the global financial markets have seen some truly groundbreaking ups and downs. From the economic crash of 2007 to indices reaching new heights as of late, such volatility has left some investors worried. Now that the Brexit has been confirmed, there are even more traders who are looking for a viable alternative to traditional stocks and shares. One method which is worth noting is seen in spread betting. To get a better understanding of the processes behind this principle, it is prudent to examine it in greater detail.

 

Bi-Directional Strategies

 

The main point behind spread betting is that an investor can make money even if the markets fall. This is in direct contrast to other methods which will require a positive movement in order to turn a profit. Spread betters simply predict in which direction an asset moves. Should this direction be estimated correctly, he or she will walk away a winner.

 

There are two main options when taking up a position. Those who “go long” assume that the asset will rise. Traders who instead “go short” are assuming that this same asset will lose a portion of its value within a certain period of time. Of course, any movements that are the opposite of either prediction will result in losses.

 

Many astute traders took advantage of short positions during the financial crisis. As the majority of assets lost a considerable amount of value, they turned healthy profits. In the same respect, other individuals went long in safe-haven commodities such as gold. They were also able to reap rewards.

 

Defining the Spread

 

Every spread bet comes with two prices:

 

?      The buy price is associated with those who go long and expect the value to rise.

?      The sell price is for short-selling traders who expect the price to fall.

 

If either of these margins are reached, the investor can liquidate his or her assets for a profit (depending upon which strategy they employ). The difference between the buy and sell prices is simply known as the “spread”.

 

Simple Spread Betting Tips

 

Not only can predicting the movement of a discrete asset be challenging, but investors will also need to employ a sound strategy to build sustainable wealth over time. Perhaps the most important suggestion is to place limits on the number of markets to be traded. Simplicity here can very well be the key to success and it can be very difficult to monitor numerous markets without missing important movements. Therefore, stick to two or three which are very familiar.

 

Another trick is to place limits on the amount of capital invested during any given session. It is wise to never risk more than three per cent of the total available funds. Even if the entire session turns out negative, you will still be able to walk away and trade another day.

 

Other methods include:

 

?      Setting clear entrance and exit points.

?      Avoiding emotional trading.

?      Monitoring politics, interest rates and related global news at all times.

 

These three final tips are much easier to embrace when utilising the turnkey solutions that can only be found at reputable spread betting companies like CMC Markets. Please examine these tools and advantages in more detail to fully the efficacy of this software.

The top Factors to consider when selecting Trading Software

canstockphoto27431685If you are contemporary market trader, you are likely to be familiar with online platforms and their numerous intricacies. Despite this, the sheer wealth of options available to traders can be overwhelming to new traders, or even those who are looking to transition between platforms. It is therefore crucial that traders take proactive steps towards determining what they should look for in an online platform, so that they can make an informed and ultimately rewarding decision.

3 Factors to look for when selecting Trading Software

With this in mind, let’s take a look at the main factors to consider when selecting your trading platform. These include: –

Does the Platform offer Access to a Demo Account?

This is arguably the most important consideration, particularly if are new to the market and selecting your first trading platform. The option of opening a demo account enables you to hone your skills and develop your strategy in a simulated, real-time market environment, as you leverage virtual capital and operate without risk. It is worth trading through such an account for between three and six months, before you make the transition to a full trading package on the same platform.

How many Asset Classes can you Trade through your Platform

If you look at the types of trading platform available you will see that there is an option to invest across a number of markets, products and derivatives. From forex and currency to precious metals, it is possible to create a diverse and lucrative portfolio that can be managed through a single platform. This not only makes it easier to spread your wealth without compromising on the quality of your trades, but it also ensures that you can adapt your portfolio at any time depending on external market considerations.

The Benefits of Real-time Market Access

While all financial markets are time-sensitive to some degree or another, entities such as the foreign exchange are accessible 24-hours a day and particularly susceptible to real-time trading. Access to an online trading platform makes this possible, as you can connect to your account instantly through a laptop, PC, smartphone or tablet regardless of your physical location. In some instances, you can even access your account without a viable Internet location, which is ideal if you are stranded in remote locations.

How and Why SMEs Should Focus on Forex Trading

canstockphoto15026534There are many different reasons why a lot of small and medium businesses can be interested in forex trading. It can be a necessary part of everyday workings for some, while others will look to forex trading as a way to increase profits. If your SME is considering trading forex, then there are a number of reasons why it should take it seriously and ways to do this to ensure that you do not lose out on a lot of money in the process.

The Importance of Forex to Business

Foreign exchange and the current rates are incredibly important to every company that does business with clients, customers, suppliers and more based abroad. This is because a lot of money will be transferred in both directions, and the current rates can affect how much is gained or lost through such transactions. Other businesses that have vast profits or work in the finance sector can also use the forex market to boost their own earnings and reinvest in the company to help it grow.

Businesses Benefiting from Forex

Importing, exporting, delivery and logistics companies are some of the primary businesses that benefit from forex understandably. NGOs and charities, real estate and travel companies are some of the others, as they all have dealings abroad and with currency. Distributing funds to stakeholders around the world involves having a strong knowledge of the current markets to make the most of exchanging currencies.

Decide on Capital and Risk

In the same way as investing personal finances in the forex market, before your SME begins forex trading you must decide on the starting capital. This is the initial amount that will be invested in the practice and the company must be able to spare it. Determining the amount of risk that will be attached to all trades, leverage and margins is also important to avoid losing too much should your first ventures be unsuccessful.

Use Efficient Trading Platforms

In order to begin forex trading your business will need to have a reliable and quality trading platform, such as one from Oanda. This will allow more than one user to make trades within your SME, have access to a demo account to practise beforehand and make trades quickly and efficiently from various devices. Whether you’re trading currency through necessity or are doing it to help increase your business’ profits, deciding on capital, risk and having a quality platform is the best way to start.