CFD Trading Explained

CFD is an acronym for a contract for difference. It is a form of investment in which the outcome is determined by calculating the difference between the price the trade opened and the price it was closed. It is a financial instrument that can be traded and reflects the movement of any financial asset. In simple words, CFD trading allows the experienced trader to predict the price movements of the most tradable assets including currencies, commodities, stocks, indices bonds, and ETFs. If the trader’s foresight is correct, they make money. That is, profits or losses are realized when the asset under consideration moves in the against the predicted direction

The CFD trade is actually a contract between the client and the broker. Trading in CFDs has many advantages for the trader and this is perhaps the reason why CFDs follow Forex Trading and have become increasingly popular in the recent past. It is also to be noted that CFD trading is as much risky as it is profitable and not suitable for beginner
Traders can use CFDs to go “short” when you believe markets will fall or can go “long” when expect the prices to rise