CFD Trading
CFD stands for Contract of Difference. Put simply this is the contract between a broker and an investor. It allows the investor to speculate an increase or decrease in the financial markets and the selected instruments. Once the contract has been closed then the two parties will exchange the difference between the opening and closing price.
Why trade CFDs?
There are many advantages to trading CFDs. One of the major ones is that you can trade on margin. This allows traders to hedge risk exposure by speculating on increasing or decreasing prices. This is important because you don’t have to purchase the asset at full value. This doesn’t mean trading CFDs doesn’t come with a risk. Traders must be aware of the risks and understand margin-traded investments. Leverage is set by the regulatory body at 1:50 by default. Depending on trader experience you will have the opportunity to change this leverage. Trading CFDs give traders more flexibility and diversity when trading the markets.
CFD Trading Strategies
There are various CFD Trading Strategies that can be broken down :
Short-term trading uses small market price movements. There are 3 main types of short-term trading: Scalping, Day Trading and Swing Trading. These trades can consist of trades that will take only a few seconds and trades that could take a few days. Whatever trading route you decide to take, whether it be long or short term, there are always risks. These need to be assessed and proper research needs to be carried out before making a trade.
Day traders look to liquidate positions at the close of trade. Day trading can be used for long-term performance through price action-based methods. For this type of trading, market analysis and information on news and events need to be monitored before making a decision. Put simply it is the buying and selling of the same security in a margin account within the same day.
Scalping involves profiting off of small price changes. A number of trades are put throughout a trading session and focus on short-term daily trades. When scalping the trader is looking to make frequent small profits off of small price changes. For this reason, it is important to look for new market information from the economic calendar in order to best carry out their trading decisions.
Swing trading involves trades that will take days or several weeks to profit from a predicted price move. Swing trading can also be used to utilize profits in short-term swings. This type of trading needs to focus on fundamental analysis and try to catch price changes at highs and lows.
Let’s Trade!
Gain access to various markets and instruments, while receiving expert support. Equip yourself with all the tools and information needed to carry out a successful trade, from a leading, global broker!
APLFX (PTY) LTD with registration number 2021/804619/07 is a limited liability company registered in First Floor Constantia Emporium CO ladies mile Spaanschemat River Roa Constantia, Western Cape 7806 and it is an authorised financial services provider (52045) in terms of Section 8 of the FAIS Act.
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General Risk Warning:Trading leveraged products such as Forex and CFDs carries a high level of risk thus may not be appropriate and/or suitable for all investors. The investment value can both increase and/or decrease and the investors may lose all their invested capital. The content of this website does not constitute financial or investment advice. Any information herein is of a general nature and does not take into consideration your personal circumstances, investment experience or current financial situation. Under no circumstances shall the Company or affiliated Companies have any liability to any person or entity for any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to leveraged products. Whilst every care is taken to ensure that the information on APLFX (PTY) LTD website is current and accurate, please click here to read our full disclaimer notice.