CFD and Forex Trading

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What are CFDs?

A CFD (contract for difference) is a financial product which "imitates" the behavior of another called "underlying asset".

This underlying asset can be a share, oil, gold or any other asset from any financial market.

It is a contract between you and your broker since you will never physically own the product you bought or sold.

However if the price of a CFD you bought rises, you'll earn money and if it falls you'll take a loss.

A CFD is much cheaper than the price of the underlying asset. This feature makes it more accessible to trade with.

When trading with CFDs, you will have to pay a small fee called "spread".

With CFDs, you can speculate on rising or falling prices of stocks, indices, forex or commodities!

Thanks to a free demo you can get acquainted with CFDs on shares, indices and raw materials. Apply for a free demo of the trading platform at one of the brokers we have selected.

After that, you can switch to a real account and add money to your account with a bank transfer or a credit card, among others, so that you can always quickly get down to work on the market.

Trading with a leverage effect

Thanks to CFDs you can enjoy a leverage effect, just like you know from other products like options. But CFDs don't expire and don't lose value over time.

Unlike many other financial products, you can decide beforehand how much money you want to risk losing at most.

You can do this by placing a stop loss for each position. You should preferably choose a guaranteed stop.

To protect the trader, at European regulated brokers such as Plus500, Fortrade and Markets, positions are automatically stopped out as soon as the margin is used up: your account will never go below zero.

Long and short

With CFDs, you can easily go long and speculate on rising prices, but it's also possible to open short positions, so you'll win money when prices are falling.

With CFDs it really doesn't matter if the market is rising or falling, you can profit from both these moves, up or down.

CFD trading: low costs

On the CFD and Forex platforms, you trade with very competitive spreads.

You don't pay any commissions with most of the brokers: the trading costs are covered by the bid/ask spread and by the premium, you pay if you keep the position open for more than one day.

On a yearly basis, the interest over this amounts to only a small percentage.

More about CFDs

On the CFD's and leverage effect page you can learn more about how the leverage works and how you can control it.

Be sure not to use the highest leverage available!

Open an account

Compare the CFD platforms and try the free demos or open an account right away.

With an account, you can trade CFDs on shares, indices, commodities (oil, gold, silver, platinum, etc.) and on the Forex market (currencies).

With the free demo, you can practice with a fictitious capital so that you learn how to trade with CFDs and familiarize yourself with the platform from the brokers we selected.