CFD Trading and CFD Brokers - PowerPoint PPT Presentation

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CFD Trading and CFD Brokers

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Title: CFD Trading and CFD Brokers


1
Virtual Trading Using CFDs
  • Contract for Difference or simply CFD trading is
    a kind of virtual replacement of physical
    trading. In physical trading first we select a
    market on which we wish to trade. Next we
    purchase the product. And finally we sell them.

2
  • The difference of sell price and cost price,
    multiplied with the product volume, gives us the
    profit or loss depending on the trading success.
    The virtual counterpart of this trading is the
    CFD trading.

3
  • In Contract for Difference trading us first find
    a market, from the list of available market
    domains. Then we open a stock with an opening
    price. Finally at a point of time we close the
    stock with some closing value. The difference
    multiplied by the volume of underlying market or
    product gives us the profit.

4
  • When you wish to start CFD trading, you first
    need to deposit marginal money. This is known as
    margin value. It is calculated as a minimum
    percentage of the total value of the opening
    stock. The total value is calculated by
    multiplying your market volume with value of each
    opening stock.

5
  • The minimum margin requirement is 3 of the
    opening stock value. The minimum stopping point
    is placed at 80 distance of this margin value.
    Again every market will have a Maximum Computer
    Generated Stop Level. The maximum allowance that
    your system will give you to place your stop
    loss, will be having a 80 distance with this
    value.

6
  • If you are personally not setting your stop loss
    when opening the account the software system will
    do that for you. By default it places the stop
    loss at 80 difference from CGSL or the total
    value of your fund, whichever is lower.

7
  • This can be altered by you only after opening
    your position. You can set a trailing feature
    with it too. It helps you to anchor your stop
    loss with the price ups and downs and finally
    puts it in a profitable point for you.
  • Contract for Difference trades are always
    profitable, provided you know how it works. So,
    take time to know it and then have some real good
    trading.
  • For more information on trade CFDs, visit
    http//www.tradecfds.net

8
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