CFD trading platform
Trading on the stock exchange today is one of the most attractive and profitable activities for those who want to make money online. The main advantages of working online are that you can work from anywhere in the world and that you do not need to visit an office. Real earnings according to ability and knowledge, regardless of diplomas, references, work experience, as well as personal characteristics of the user (gender, age, religion, nationality, personality traits, etc.).
Before trading on the exchange, it is advisable to study all the conditions and requirements, to consider different CFD trading platforms, to choose suitable assets and to set trading objectives. Even a novice trader can make good money, provided you have the knowledge and skills to do so. Trading on a stock exchange, although done virtually, is not much different from any real trading.
Virtual trading on online platforms is now considered to be the most popular and large-scale, because it is fast, efficient and does not require any real involvement in the process.
You don't have to meet any special conditions or requirements to trade. It is enough to have a laptop or a desktop computer connected to the Internet, several hundred dollars in your account and the desire to understand all the intricacies. All you need is to choose a broker, choose a CFD trading platform, register, open an account, access the exchange and start trading. Try it, and you will succeed!
Trading platform capabilities for trading CFDs
Among the new opportunities in today's world, traders use the platform for trading CFDs or Contracts for Difference. This is a contract that regulates the transfer of the difference between the price of a trading asset when it opens and the price at the time it closes, as agreed between the buyer and the seller. If the price rose, the difference is paid to the buyer of the contract (positive difference). If the price falls (negative difference), the amount is paid to the seller. The term of the contract is not regulated by stock exchange rules.
What accounts for the current popularity of CFDs?
When investing in a CFD trading platform, a wide range of different assets is available for all types of exchanges. This branch of the trading world is available both to professional traders and to beginners who do not yet operate with large deposits. Thus, there is no need to invest in expensive assets when you can profit from their price difference between opening and closing.
Pros of working with the CFD trading platform
- Relatively low deposit to open a position. For example, the amount required to open almost all positions is 5-10% of the market value of the contract. This is 10 to 20 times less than the fees charged for classical trading on the stock market.
- There is no need to wait for verification of orders to be opened on the exchange.
- Guaranteed execution of all stop orders in case of any market changes.
- Relatively low transaction size requirements: 10 shares = 0.1 lot.
- In classical exchange trading, leverage is relatively low and the trader must pay a relatively high commission, while in CFD trading, leverage is high and requirements for the trader's deposit are relatively low.
- Investments are diversified and it is not necessary to open accounts with other companies when trading on all the markets at the same time.
The ability to trade the same prices as other speculators because of the open access to the market spreads without the need to widen them.
Disadvantages of using the CFD trading platform
- CFD is not an investment instrument. This type of trading is purely speculative in nature as the trader does not own the asset on which he makes market transactions. It means that he does not have an opportunity to receive any dividends on the working asset and delivery.
- Trading CFDs carries big risks and losses for a speculator with a small deposit.
As to the first disadvantage of CFDs, it is not a particular obstacle in trading, because in practice, the majority of market participants are more interested in making speculative profit from an asset, than in owning the instrument itself.
CFD trading is an alternative to classic stock trading. There are risks in every business. Only a competent trading system can give you the confidence to work! So, go ahead and have a successful trading!
To get additional insight into the future price movements of the asset, traders on the best CFD trading platform use technical analysis: indicators and charts. These tools provide signals to buy or sell at specific market conditions.
Indicators for CFD trading
- Relative Strength Index (RSI). Shows the strength with which the price changes, determines the sentiment of stock market participants. It measures relative market strength. It shows whether the stock market is overbought or oversold, and gives excellent signals of an imminent reversal.
- Moving Average (MA). A moving average smoothes out price fluctuations, filtering out market noise and highlighting the direction of the trend. Because the MA is based on past price data, it is a lagging indicator.
- Moving Average Convergence/Divergence (MACD). It determines the future price movement of an asset by correlating two moving averages. It consists of two lines: the MACD line and the signal line. When the MACD line crosses the signal line from bottom to top, this is a buy signal. A signal for sale is when the MACD line crosses the signal line from top to bottom.
- Bollinger lines (BB). They measure the volatility of the market, and also determine the overbought and oversold level of the asset. The indicator consists of three lines: SMA (middle band), upper and lower bands. As a rule, the closer the price is to the upper line, the more overbought the chosen asset is. Conversely, the closer the price is to the lower line, the higher it is oversold.
- The ADX, or Average Directional Index, is a trend indicator to gauge the strength of a trend. This ADX indicator can be used to catch trends and predict their imminent end.
Technical analysis also uses trading charts as a tool for predicting price action.
CFD trading charts
- Linear (based on closing prices of the selected timeframe). A line chart is a graphical representation of changes in the price of an asset by means of a line movement.
- Japanese candlesticks (displaying extremums, opening and closing prices of a timeframe). Visually, the chart looks like this: a rectangle of solid colour (the body of a candle) with tails up and down (the shadow of a candle). Each candlestick is the data about price fluctuations for a selected timeframe. A new candlestick is formed each time frame. The colour of a candlestick depends on whether the price of an asset is going up or down.
- Bar chart (gives the same market data as a Japanese candlestick chart, but with a different interpretation). The bar chart shows the highest and lowest price level at any given time frame. It shows the opening and closing price of the asset of interest, as well as the maximum and minimum price at each time interval.
Your success in trading depends on reading the charts correctly. Study the charts, make friends with them, and they will not stay in your debt. Have a nice trade my friends!
How to make money trading CFDs?
CFDs are not traded on the real market. They may be considered as a bet without a fixed expiration date, the main object of which is the value of the asset without any change in the ownership of the instrument itself. That is, the trader profits from changes in the stock price, but does not buy the stock itself. A quote is the price of a commodity that is formed during trading. Bidders announce the price at which they are willing to offer an offer and conclude a transaction. Often, a quote refers to a dynamic price (exchange price).
A quote is not just a ratio of numbers. It is important not only to know the theoretical approaches to the study of quotes, but also to be able to apply them effectively in practice. Try it and you are sure to succeed!
Make sure you have a sufficiently good understanding of the instrument from which the CFDs are derived. Do not take on complex assets at once, such as indices, which are influenced by several dozen stocks. Start with blue-chips, energy or metals. There is a lot of information about them. That means you have a chance to make correct predictions.
If you trade systematically on a CFD platform, revenues will prevail over costs. You need to choose a suitable strategy and adapt it to your habits, skills and preferences. Obviously, the CFD trading platform implies a higher or lower change in the value of the asset. Therefore, you should only trade when there is a clear 'bull' or 'bear' trend. If the instruments are in a flat, they should prefer another, more mobile market.
The time to open a position may be determined by the start or turn of a trend. To understand when this will happen, you need to be able to use technical analysis. Charts and indicators will help to accomplish this task. You should not trade on the news. CFDs involve margin, which does not work well in unpredictable markets. Therefore opening a trade after an important news release is not a good decision.
Is it realistic to make money on a CFD trading platform?
Of course, like any other instrument, CFDs can be used for profit. In order to make money with CFDs, you will need a lot of knowledge, skill, experience, patience and discipline.
How to start CFD trading?
The current trend in internet business is to learn how to trade CFDs through online platforms. The Internet is becoming a favoured place for investors and entrepreneurs due to the favourable business environment and growing entrepreneurial opportunities.
The only thing that is required from the trader is to open a brokerage account with a CFD platform, which is a professional securities market participant. Today, all stock exchange transactions are conducted by means of the internet. Therefore, it must be clearly understood that any transactions will have to be done via electronic devices (PC, laptop, smartphone).
You don't even need to leave home to register and fund your account. Everything happens online - you register on the website, fund your account with VISA, MasterCard, etc. and buy any securities. After the registration you can already start trading on the stock market.
We recommend that you first open a demo account before you start trading on the best CFD trading platform. This will allow you to try trading with virtual USD. Only once you get an idea of how the system works, you can make a deposit for a real account or use leverage. Remember, leverage is a good financial tool for those who have already learned how to manage capital and have a low percentage of losing trades. In the hands of an inexperienced trader such a tool can lead to a total loss of your own funds.
Can I trade on a CFD platform without leverage?
Yes, it all depends on the service that the particular broker provides. Some providers allow traders to choose a leverage for each trading account. A leverage of 1:1 means trading without any borrowed capital, in which case the trader is fully funded on every trading position. However, please note that trading without leverage does not eliminate the risks associated with the use of CFDs.
The best CFD trading platform is open 24/7. This means that you can log into your trading account anywhere and anytime. You will always be able to track your trades. Take control of your financial future now!