Forex Trading: Introducing CFDs

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F o r e x Tr a d i n g :

LegacyFX Introduction

INTRODUCING CFDS

Forex Trading: Introducing CFDs The abbreviation CFD stands for contract for difference and is a type of trading contract that is based on movements in price rather than the value of the underlying asset. CFD trading is used across various assets classes, including stocks, shares, commodities, futures, and Forex.

Revenue Based on Price Changes In a CFD trade, the investor is not purchasing the underlying asset. They are speculating on how the value of the asset will change within a specified period of time. A CFD is therefore not a trade as such, but an agreement between a broker and an investor.

Long or Short One key advantage of CFD trading is that the investor can choose to go long or short. This means there is the potential to make money on trades where the value of the asset decreases; the investor can make money by accurately predicting a decrease in price as well as an increase. Another advantage of CFD trading is the ease of execution.

A CFD is therefore not a trade as such, but an agreement between a broker and an investor.

One key advantage of CFD trading is that the investor can choose to go long or short.

Contract for difference trading is widely used within the global Forex market. YOU CAN LEARN MORE ABOUT FOREX TRADING BY VISITING THE BLOG OF LEGACYFX.