Are you interested in taking part and gaining full advantage of investing in the online world? If you want to embrace the risks it accompanies, then you might try to consider opening an account in CFD trading. Just like in Forex trading, trading CFD also offers a couple of exciting benefits. The main aim of CFD is to let the traders speculate on the price movement of the underlying asset. Once the trader predicts this change correctly, he can gain profit.
The underlying asset is not particularly owned by the CFD trader. But, you can still benefit from its every movement. Even in negative market conditions, these instruments can still be traded. Therefore, even a bearish environment can be turned into a profitable one.
Trading CFD also has a very easy-to-sell position in CFD compared to other financial assets. Because of that, liquidity is desirable especially if you are looking for a short-term strategy.
The Margin Issues
If you happen to consider using CFD, margins are something that needs to be considered. Margined trades allow traders to place a very small deposit but command a huge trading position. This means that you can gain profit even by just spending a small capital amount.
But this advantage can also turn into a nightmare because a losing position in CFD means that you will be put at greater risk more than you expected. Margin trades definitely offer wealth opportunities but you must only use them if you have proper knowledge and experience on them.
Take is Slow
As mentioned above, there are a handful of advantages that trading CFD has to offer. To summarize it, trading CFD advantages include;
- Traders can enjoy a liquid position.
- Traders can use margin trades.
- Traders can benefit from a falling position.
What’s also very important in trading CFD is employing a reputable and trusted trading platform. They must be regulated by your country’s regulatory agency to ensure that your money is in safe hands. The trading platform should also have good customer service. This ensures that your questions will be answered as soon as possible. A good trading platform must also have position feedback from their previous clients. You can always find this feedback handy when you have doubts in your head.
Top 5 Best CFD Brokers in 2020
It is an international CFD broker with headquarters situated in London and Warsaw. XTB offers low fees, fast deposit, and withdrawal and comes free of charge. Their account opening is also pretty fast.
Next to XTB is the City Index. It has been in business since 1983. Because of its long track record, this CFD trading platform is considered to be totally safe.
Like XTB and City Index, CMC Markets also offer low fees. They also have good web and mobile platforms. Their research and educational tools are very advanced.
Another famous CFD broker on the list is eToro. They offer free stock and ETF trading, easy opening of the account, and social trading experience.
ActivTrades also has low trading fees, good customer support, and free withdrawal and deposit.