Expert Review of Forex Trading of CFDs: What Is It and How to Trade Them
A contract for difference (CFD) is a deal between a buyer and a seller, where the buyer agrees to pay the seller the difference between the current value of an asset and its worth at the time of the contract.
CFDs enable traders and investors to profit from price movements without having to own the underlying assets. The value of a CFD contract is determined solely by the price difference between the trade entry and exit.
This is executed through a contract between the client and the broker, and no currency trading, stock, commodity, or futures exchange is used. Trading CFDs brings several substantial advantages that have strengthened the instrument’s immense popularity over the last decade.
Also, all CFDs are leveraged, which means that you only need a relatively small deposit (called margin) to open a larger position. However, as your final profit or loss is dependent on the whole size of your position, either could exceed your margin amount greatly. When trading CFDs, you should always apply suitable trading risk control measures.
In the new article, our team prepared an expert review of CFDs trading meaning essence of the financial derivative and key functional principles, including trading with leverage, as well as best Forex brokers providing trading in CFDs for currencies, commodities, indices, Cryptocurrencies, and other instruments with various bonuses.
Learn how to trade CFDs on the Forex market
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