Learn CFD Trading basics

Advantages to CFD trading include lower margin requirements, easy access to global markets, no shorting or day trading rules and little or no fees. However, high leverage magnifies losses when they occur, and having to continually pay a spread to enter and exit positions can be costly when large price movements do not occur. CFDs provide an excellent alternative for certain types of trades or traders, such as short- and long-term investors, but each individual must weigh the costs and benefits and proceed according to what works best within their trading plan.

CFD Trading Contents

1. What is a Contract for Difference (CFD)?
2. Why Trade CFDs?
3. CFD Trading examples
4. Understanding CFD leverage

The goal of this CFD Tutorial is ..

• To outline the basics of trading CFDs;
• To show the difference between stock trading and CFD trading;
• To give CFD examples so you can clearly understand how the profit and loss is calculated on a CFD trade;
• To illustrate the key benefits of CFD leverage and the key dangers of CFD leverage;
• To show you how to work out CFD financing rates; and
• To highlight the various CFD order types you can place with your CFD broker

It is important to keep in mind that a CFD tutorial will never be very extensive and the reason for that is very simple. Contracts for Difference (CFDs) are exactly like trading shares except you need a small amount of money up front. There are a couple of other subtle differences and that is what this CFD tutorial is about.

So once a CFD tutorial has covered the basics of the product (which doesn’t take much) the next step is teaching trading techniques like technical analysis or Gann or Swing trading.

There are a number of stock market educational companies that dress their CFD tutorial up into a 1-2 day course but its really only 2 hours of CFD education and 6 hours of stock market techniques.

We are confident that once you have gone through the CFD tutorial material provided here, you will understand how Contracts for Difference (CFDs) work and understand how you can use them to enhance your own personal trading.

You may find that you need to come back a couple of times to read through all the material so make sure you bookmark this page using the social bookmarketing tools provided below.

Be patient when learning CFDs and you will find you enjoy that much more. Better still, start learning about CFDs or start this CFD tutorial with a friend and keep each other motivated. And now we explain finance instruments like contract for Difference.