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londi

Newbie
7 0
Hello everyone !! :)
I currently trade binary options and i want to "evolve" to the real trading.
i heard about CFD from a froend and he says that you can make great profits there.
Can you please explain me what CFD is , how does it work , who is the best brokers and everything about that business?
thank you very much!!
 

timsk

Legendary member
7,385 2,167
Hello everyone !! :)
I currently trade binary options and i want to "evolve" to the real trading.
i heard about CFD from a froend and he says that you can make great profits there.
Can you please explain me what CFD is , how does it work , who is the best brokers and everything about that business?
thank you very much!!
Hi londi,
Welcome to T2W.

We don't have any guides here as to what CFDs are and how they work because this topic is covered in detail by all CFD brokers. To find brokers that offer CFDs, take a look at the Spread Betting & CFDs category in the Broker Reviews section of T2W. Click on any broker that lists CFDs and go to the FAQ page on their site.

We do have a FAQ of our own which compares CFDs to spread betting. The latter is a similar - and very popular - trading vehicle here in the UK. You can view that FAQ here: What are the Pros and Cons of Spread Betting Vs CFDs?

One thing you ought to be aware of is that, in spite of what your friend may have told you, there is no inherent advantage in trading CFDs in preference to any other trading vehicle. It's just another derivative product like warrants or options. Needless to say, if it was easier to trade CFDs than anything else, or more money could be made by trading them than anything else, then everyone - as in everyone - would trade them!
Tim.
 

londi

Newbie
7 0
Hi londi,
Welcome to T2W.

We don't have any guides here as to what CFDs are and how they work because this topic is covered in detail by all CFD brokers. To find brokers that offer CFDs, take a look at the Spread Betting & CFDs category in the Broker Reviews section of T2W. Click on any broker that lists CFDs and go to the FAQ page on their site.

We do have a FAQ of our own which compares CFDs to spread betting. The latter is a similar - and very popular - trading vehicle here in the UK. You can view that FAQ here: What are the Pros and Cons of Spread Betting Vs CFDs?

One thing you ought to be aware of is that, in spite of what your friend may have told you, there is no inherent advantage in trading CFDs in preference to any other trading vehicle. It's just another derivative product like warrants or options. Needless to say, if it was easier to trade CFDs than anything else, or more money could be made by trading them than anything else, then everyone - as in everyone - would trade them!
Tim.
Thank you very much!
CFD is similar to binary trading, right?
can I start to trade CFD with initial capital of 500$? or is it too low?
 

timsk

Legendary member
7,385 2,167
CFD is similar to binary trading, right?
No londi - it's not.
Both involve speculation for profit, and the decisions about what instruments to trade and how to trade them may be the same but, the trading vehicles themselves are completely different.

Follow the links in my last post and do some research!
;)
Tim.
 

luckystrike23

Active member
120 3
yep and check this for spread bets http://www.financial-spread-betting.com/Spread-trading-faqs.html

If you are in the UK you might want to consider spread betting first as it can be easier to access (lower capital required)/understand.

Binary bets and CFDs/spreadbets are different. Binaries are like sports bets - you are placing a fixed odds bet on a market outcome - it can either happen or not happen - with CFDs/spreadbets the more right you are, the more you are rewarded (and the opposite applies the more wrong you are, the most you lose)
 

yellowfloyd

Active member
109 2
Hello everyone !! :)
I currently trade binary options and i want to "evolve" to the real trading.
i heard about CFD from a froend and he says that you can make great profits there.
Can you please explain me what CFD is , how does it work , who is the best brokers and everything about that business?
thank you very much!!

You can indeed make great profits, but you can also make great losses. With your binary bets you either call them right or wrong, with potential gains/losses predefined and fixed from the offset. If you call the FTSE to close up more than 50pts and it does, you make a fixed amount. If it doesn’t you lose a fixed amount. CFDs are based on how much the underlying price changes. If you call the FTSE to rise you gain or lose depending on how far the price moves in or out of your favour. You can of course limit your risk using stops losses, but unless you use guaranteed stops (insurance policy, premium payable) you never know for sure how much you could lose. Another element to bear in mind is that your binary bets also have a fixed duration. A CFD position might take you days, weeks or months to rise or fall as much as you hope. The fact CFDs are leveraged (you’re borrowing money to gain full exposure) means you also have to put up a deposit, pay financing and pay a commission. Loads of brokers out there offering CFDs. It depends what kind of service you are looking for. I hope this helps.
 
 
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