Get CFD-trading-ready with our top beginner course

Our course prepares you for the crazy ride of CFD trading

CFD trading has inherent risks and many traders are wary of it. But knowing what you’re doing when it comes to this kind of trading makes all the difference. Our online beginner course has been put together to give you the knowledge you need to feel confident trading CFDs.

Find out why our CFD online trading course is worth your time by filling in the form

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Get CFD-trading-ready with our top beginner course

Our course prepares you for the crazy ride of CFD trading

CFD trading has inherent risks and many traders are wary of it. So knowing what you’re doing when it comes to this kind of trading thus makes all the difference. Our CFD online trading course has been put together to give you the knowledge you need to feel confident trading CFDs.

 

Find out why our CFD online trading course is worth your time by filling in the form

 
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How does CFD Trading work?

CFDs involves speculating whether the price of an instrument will rise and fall. In some markets, this is possibly viewed as a form of gambling and is heavily regulated in the case of the United States. You can make money from CFD trading, but there are inherent risks and many traders avoid CFDs, because they are wary of the risks or they don’t know enough about the product.

If you are interested in taking a course on CFD trading, you may want to take a look at other entry-level online trading course options or fill in our form and we’ll contact you.

SOME FREQUENTLY ASKED QUESTIONS ABOUT CFD TRADING

If you still can’t find the answer to your question, contact us for more information.

A CFD is the ‘contract of difference’ which is the term used to describe the opportunity to profit from price movement on stock without owning the asset. It’s a popular form of derivative trading. Basically, a CFD trader speculates in a bullish (up) or bearish (down) market on the rise and fall of prices on fast-moving global financial markets such as shares, commodities, currencies, treasuries and indices. 

A CFD trader buys a certain number of contracts on a market when he or she thinks the price will rise. The person sells the contracts if he or she expects the price to fall. CFD trading allows a trader to speculate on the future movements of an asset’s price. A trader will “go long” if the price is likely to rise, or a trader will go “short” if the price is likely to fall. CFDs are calculated by the movement of the asset between the entry and exit point of the trade. The only value that’s important is the price change, rather than the actual value of the asset.

Choosing to trade CFDs rather than stocks means you require a small amount of money upfront to control the whole position. The return you can potentially make on CFD trading is surprisingly high if you consider how low your capital outlay is. What makes CFDs so popular is a trader only uses a small amount of money (margin) to control a larger position (leverage). The trader lays out less capital for lower margin requirements and expects greater potential returns. The marketed CFD trading systems provide higher leverage than traditional trading on the stock market. 

Leverage is a trading strategy that uses borrowed money to increase the potential return on an investment. A company or investment that is highly leveraged means that entity has more debt than equity. An attractive feature of CFD trading for some is there are no shorting rules. Shorting or short-selling as it is referred to, is when a trader borrows shares and sells them immediately in the hope he/she will be able to pick them up later at a lower price. The trader would then return the shares to the lender and bank the difference. However, shorting is risky which is why exchanges apply strict rules to shorting for other investment vehicles.

There are pitfalls to trading CFDs. The biggest issue is the fact that the potential to profit on small moves is eliminated because a trader has to pay the spread on entry and exit prices. The spread decreases winning trades by a small amount and increases losses by a small amount. In other words, a CFD trader’s profits are trimmed through the cost of the spread. The CFD trading market moves fast and you need to be vigilant. You need to closely monitor the price movement because there are liquidity risks and margins that you need to maintain. 

Your position will be closed by the provider if you are not able to cover reductions in values. You will then have to meet the loss, regardless of what happens to the underlying asset. Leverage risks open up a CFD trader to the prospect of greater profits but also lays him or her bare to greater potential losses. This is particularly true if there is a sharp price movement or the market is closed. Execution risks also happen when there is a lag in the trading time.

As with any financial instrument that involves a degree of speculation are CFD trading inherently risky. Never trade with money you cannot afford to lose. CFDs are leveraged so while there’s the potential for a good return on a small deposit, it’s also possible to lose more money than you deposit. If you are trading CFDs, placing stop-loss orders to help offset the potential risks is very important. A guaranteed stop loss order is a pre-determined price that automatically closes the contract when the price level is met. Alternately, speak to our skillful staff today to find out more about our beginner CFD online trading courses
The spread is the difference between the bid and the ask price. The bid is the price in the market that a Buyer will pay, and the ask is the price a Seller is willing to accept. For example, the USD/JPY bid/ask spread is 110.00 / 110.02. Currency pairs that are less actively traded have wider spreads.
Margin is money you need to have in your broker account to secure your open position. Different brokers require different amount of margin money to keep your positions open.
Yes, sure thing! Our dedicated Support Team and a FSCA regulated Trading Expert are available to help you make very intelligent decisions when it comes to any safety net (Stop Loss Lines & Take Profit Lines).
We’ve been in a very pleasurable position to be changing people’s lives for the past 4-years as a South-African registered company and our preferred FSCA regulated Broker been adding valued to our Clients’ lives since 2012.
DISCLAIMER & NOTICE: The answers are for educational purposes only and not financial- and or investment advice. Trading can be very risky. Never trade with money you cannot afford to lose. Always seek the advice of our preferred regulated FSCA Broker and or a regulated FSCA Financial Advisor.

[i] Disclaimer: This information is applicable at the time of publishing.

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