CFD - Contract for difference
The future of online trading and investing
The CFD contract is a simple and flexible financial instrument. Its goal is to provide investors with access to a wide range of global assets, including stocks, commodities, cryptocurrencies and indices. At the same time, there is no need to purchase any underlying assets.
More than 500 financial assets are available to traders GuardianStock. They can conclude contracts with a leverage, opening positions at certain price levels. When the position is closed, the difference between the open price and the closing price determines the profit of the trader. CFDs can make a big profit, but you can also lose your investment partially or completely.
CFD Online - trade in world markets simply
The novice CFD trade is often confused by the term "contract for difference". They think that they need to sign and sign a real contract with the broker to open a position. Fortunately, trading CFD is much easier and more convenient. And the term "contract for difference" comes from the method by which profit is calculated for each successful transaction.
Contract for difference - a brief explanation
A CFD contract is a financial instrument (a form of trading a financial asset). You can open an unlimited number of CFD positions on the trading platform, without entering into any additional agreements. The whole process takes only a couple of seconds and will require a few mouse clicks.
Trading CFD online, you do not need to buy the assets with which you work. You trade solely on the movements of their prices.
- Select an asset. It can be a currency pair, a commodity, a share or an index.
- Indicate how much you want to invest in the transaction, and whether to use leverage.
- Open a position to buy an asset when its price is low enough.
- Close the position when the price of the asset rises high enough. And vice versa for the position for sale.
The difference between the two price values (initial and closing) is your profit and is paid directly to your account. You can invest this money repeatedly, or withdraw them from the account.
Management of risks
Financial markets are extremely unstable and respond to various external events in a matter of seconds. These fluctuations create a lot of trading opportunities, which potentially will bring profit on CFD. But they also carry a risk. Successful traders practice risk management to minimize losses in the trading process. Effective risk management begins with a qualitative fundamental analysis and a clear understanding of the current economic and political situation. Thus, no market changes will take you by surprise.
Trading platform GuardianStock offers a number of tools for risk management:
- Stop Loss
Set this order and your positions will be automatically closed if the potential losses exceed the allowable level. The loss cessation tool allows you to leave the auction unattended.
- Profit fixing
Set this order and your positions will automatically close upon the fact of achieving the desired level of profit. Thus, you will secure your profit from unexpected falling of quotations of an active. The profit-fixing tool allows you to leave the auction unattended.
- Execution type
Use this tool to automatically open positions when the market reaches the desired state. This is another example of the "opened and forgotten" tool, since you can not keep track of your account while it is working for you.
These risk management tools are described in more detail in the materials of the GuardianStock Training Center, which is available to registered users for free.
Leverage is a tool with which traders of currency markets have long been familiar. The main principle of its work is that it allows you to open CFD positions for GuardianStock money, increasing your investments up to 200 times. In this way, you can significantly increase your potential profit.
The use of leverage can also affect your potential losses. We strongly recommend that you learn the principles of working with leverage and the corresponding risk management capabilities in the GuardianStock Training Center.
The training center is available to registered users for free.
If you open trading positions using leverage, you need to have on your trading account the amount of funds covering the position data. This amount is the margin. The size of the margin depends on the total amount of your open positions and their results. If the margin approaches the minimum allowable value, you will receive a "Margin Call". This offer of the broker to transfer to you in pledge an additional sum of means or to close positions on which covering there are not enough means.
Margin and margin call are described in more detail in the materials of the GuardianStock Training Center.
The training center is available to registered users for free.
I'm a currency market trader - can I make money on CFDs?
Trade in foreign exchange markets has been developing intensively in the past few years. At this stage, online trading CFD is probably one of the most profitable tools that allow independent investors to earn money in foreign exchange markets. High-tech trading platform GuardianStock allows you to trade currencies, investing small amounts, but increasing them up to 200 times, using leverage. On the platform you will find all the tools necessary for an experienced trader, including stop loss orders and profit taking. Trading in the world currency markets with GuardianStock is quick and open. For CFD deals, not only the most common currency pairs are available to you, but many less known ones.
CFD Trading - Highlights
- Online trading CFD is easy and convenient
- You do not need to buy assets to trade them for CFDs
- You can open / close a CFD deal in a matter of seconds
- Trading in foreign exchange markets can bring a big profit on CFDs
- GuardianStock offers a complete set of risk management tools
- Leverage will increase the amount of your investment up to 200 times
- There are no commissions, hidden fees and deductions
Should I trade CFD online?
CFD is a very flexible financial tool. It's simple enough, and it's easy for them to master perfection, even if you start from scratch. At the same time, it is quite complex, so that an experienced trader of foreign exchange markets can make many transactions using leverage. Marketplace GuardianStock meets the requirements of traders of all levels of experience. And it provides instant access to the world financial markets.
If you want to become an independent investor and independently control your trading portfolio, CFD is exactly what you need. The GuardianStock Training Center will give you all the necessary knowledge about financial markets and the application of professional trading strategies.