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Get Into CFDs Strategy
The term CFD refers to a contract for difference. Trading CFDs allows you to speculate on the price of an instrument without really owning the asset. One of the most intriguing elements of CFDs is that you can earn from both rising and declining markets.
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Factors to
consider before
you start
trading
01
The term CFD refers to a contract for difference. Trading CFDs allows you to speculate on the price of an instrument without really owning the asset. One of the most intriguing elements of CFDs is that you can earn from both rising and declining markets.
02
CFD trading is a type of financial derivative that allows you to bet on short-term price changes. CFD trading has several advantages, including the ability to trade on leverage and the ability to go short if you believe prices will fall or long if you believe prices will rise.
03
You don’t purchase or sell the underlying asset when you trade CFDs; instead, you buy or sell a number of units for a specific financial instrument based on whether you think prices will rise or fall. We’ve got you covered if you want to learn more about CFD trading or speak with an expert.
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Discovering how to set up a stock screener for trading that aligns with your strategy is key to success. With TradingView you can learn all about that and many other topics like the US Dollar Index, or DXY, a key metric for forex traders. Learn what the dollar index is and its significance. You can also investigate why the economic calendar is an essential risk management tool for traders. Learn more on TradingView.
Frequently asked
questions
Long position
A position that appreciates in value if market price increases. When the base currency in the pair is bought, the position is said to be long. This position is taken with the expectation that the market will rise.
Bid price?
The price at which the market is prepared to buy a product. Prices are quoted two-way as Bid/Ask. In FX trading, the Bid represents the price at which a trader can sell the base currency, shown to the left in a currency pair. For example, in the quote USD/CHF 1.4527/32, the base currency is USD, and the Bid price is 1.4527, meaning you can sell one US Dollar for 1.4527 Swiss francs. In CFD trading, the Bid also represents the price at which a trader can sell the product. For example, in the quote for UK OIL 111.13/111.16, the Bid price is £111.13 for one unit of the underlying market.*
Buy
Taking a long position on a product.
CFDs
A Contract for Difference (or CFD) is a type of derivative that gives exposure to the change in value of an underlying asset (such as an index or equity). It allows traders to leverage their capital (by trading notional amounts far higher than the money in their account) and provides all the benefits of trading securities, without actually owning the product. In practical terms, if you buy a CFD at $10 then sell it at $11, you will receive the $1 difference. Conversely, if you went short on the trade and sold at $10 before buying back at $11, you would pay the $1 difference.
Closing price
The price at which a product was traded to close a position. It can also refer to the price of the last transaction in a day trading session.