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Why is CFD trading best for you

by Jessica Smith Blogger

You don’t own anything. You’re just making a bet. Similar to when you are betting on a football match. You do not own any of the players, neither the ball nor the field. There are chances that if you are betting on a football match then the only thing you probably own is the screen on which you’re watching it. But you still make money off of the bets you make on what might happen.

The same thing goes with CFD trading. CFD stands for Contracts for differences. There is a contract, and there are some differences; we will talk about it later. Let’s talk about the part that spells M-O-N-E-Y.

Can I make money by CFD trading? 

Speculating is risky, but if your calculations are precise, then why not? The movie “The Big Short” depicts one such case where the movie’s protagonist goes short against the then-booming real estate and housing market of the United States Of America. This movie was not written but was an actual incident that happened. If you are sure of what will happen, then trading in CFDs is not such a bad deal. However, if you are new to the market, then trading in CFDs is not as advised. Some experience is needed before one tries their hand at trading CFDs. 

Can I lose my money while trading CFDs? 


Sometimes the trades don’t go as planned, and the improper use of many instruments with CFDs leads to the trader’s downfall.  More than 76% of the traders lose their money in the first few trades, but what about the remaining traders? How do they make their money?

Simple. They keep their expectations to the minimum, know when to be greedy and when to be in fear, and most importantly, they do not put a lot of attention to one single trade; instead, they diversify. 


Losing money rapidly due to leverage is a common sight for many traders, but it has to be kept in mind that the risks can be mitigated by using simple tools like a stop loss or take profit orders. 


Why should I trade via CFDs? 


Haven’t you heard? It’s the pandemic. No one wants to take physical deliveries any more. Everybody wants to make money and just money.  The best way to make money out of the fact that there have to be no deliveries of the physical items is CFD trading. Speculating on the price movement can be a more straightforward approach rather than owning the asset itself. Owning the asset is also less secure because once the price has moved negatively, the asset can only bring loss. Speculation Via FDs can be easy as the ptrader does not own the asset at all. 


What are the best strategies for CFD trading?


Different traders have different approaches to trading. Someone might have good capital, so they would trade differently. Someone might have a little less capital and hence, would trade differently. 

The best strategy is the one that you si and plan for yourself. We can tell as people wh have seen a lot of traders lose and gain money to use leverage wisely. 

Let us understand when not to use it, rather than when to use it. 


When should I not trade with leverage?


Traders who are low on capital and aim at using little money with big markets should avoid such an approach. When you want to make quick money, you look at quick and easy ways to make it. The market is full of scam brokers that serve the dreams of almost all the traders to the novices on a silver latter, with a silver spoon. 


Leverage should be used only when the trader has spent a decent time in the market and knows when it can possibly topple. When it does topple, an experienced trader will know how to hedge against risk, and the novice will lose money rapidly due to leverage. 



How much capital should I use for trading in CFD? 


Assuming that you are not the person that googles “how to trade with $100”, you need to have decent capital for trading in CFDs.  

With all due respect, people can trade with a hundred dollars, but the CFD market is not where they want to begin. This place needs a lot of investment, and all of it stares at the sheer vastness of loss. The losses can be huge and can also be amplified by the fact that someone used leverage in the wrong manner. 


Are you looking for a broker that can help you trade in CFDs? 

We present you with the leading online broker HFTrading. The broker has been in the game sie not a very long time but offers stiff competition to other brokers in the market. HFTrading has been doing what most of the legendary brokers do,. Providing leverage in a subtle but not a very hard manner. The broker has handmade accounts for traders of all age. HFTrading provides three ain accounts, Silver, platinum and gold. When it comes to regulations, the broker is completely regulated and not a scam for sure. 


Bottom line:


Trading in CFDs can be risky, be wise and be calm. The fact that many people lose their money in the first trade itself is not a random fact but a legitimate one. Beware of the scam brokers and always be good at math. Remember, the right math will generate results. Not the random emotions. 



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About Jessica Smith Innovator   Blogger

13 connections, 1 recommendations, 64 honor points.
Joined APSense since, February 18th, 2021, From Europe, Cyprus.

Created on Apr 19th 2021 04:09. Viewed 165 times.

Comments

Peter Mathers Innovator  Elliott Wave Analyst
Thanks for writing this article on the topic however I've written many articles on the topic but I think there are very less awareness about it.

Thanks for spreading the knowledge.
Apr 21st 2021 20:22   
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