Stocks, foreign exchange and cryptocurrencies – investors can make trades in many different markets, and in at least as many different ways. Today, CFD trading has become one of the more popular options.
What is CFD trading?
A CFD (Contract for Difference) is a contract between a buyer and a seller. The contract says that the buyer needs to pay the seller the difference between the current value of an asset and its value at contract time. This means you don’t even have to own any actual assets when CFD trading. Instead, your only job is to speculate on whether the price of an asset will rise or fall.
Why is CFD trading rising in popularity? Well, there are lots of reasons. Here are some of them:
- CFD trading requires less capital than traditional trading
- Trades can be lucrative in both bear and bull markets
- Trades can be made at all hours of the day
3 things to look for in a CFD trading platform
Are you looking for the best platform for cfd trading in South Africa? Nowadays, it’s easy to trade with CFDs. The world wide web offers lots of platforms where you can enjoy this exciting hobby. However, with so many options, it might be difficult to find the best one. Below, we list three things to look for when choosing your platform!
1. A fast and user-friendly platform
If you are new to trading, the complex world of CFDs might seem a bit confusing at first. However, there are platforms out there offering a simple solution. Make sure you choose a CFD trading platform that’s easy to navigate and understand.
Successful CFD trading depends on timing. You want to make the right move at the right time. Therefore, it’s a huge advantage if your platform allows you to execute trades by pressing as few buttons as possible. Also, you should look for a platform that offers a mobile app. This way, you can make trades from wherever you are!
2. Helpful analysis tools
Since all CFD trading is based on speculations of the market, charting and pattern analysis definitely are a helping hand. These give you an overview of the historical movements on the market. If your platform offers charting and pattern analysis that are easy to follow, it’s easier to identify market trends. This gives you the possibility to make more accurate speculations on future market movements.
3. Necessary risk management tools
All trading comes with a risk. You can never be certain that all your trades will be successful. Therefore, it’s a key advantage if your platform offers risk management tools. For example, you should look for stop loss orders. A set order will activate when the price of an asset falls to a certain level. You get to set the loss limit yourself.
Listen to your fellow traders
If you’re still feeling unsure whether a platform is a good one or not, listen to what other users have to say! All over the internet, you can find helpful advice from your fellow traders, which can make your CFD trading more successful.
