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The price at which a trader can buy a certain asset.
The sum of all deposits, interest income and realized profit minus all withdrawals, realized losses and ancillary fees.
An asset is a resource (financial or otherwise) owned by an individual, company or country that has economic value or is expected to provide value in the future.
The amount held in the client's account calculated for closed positions. (currently open positions are not included). If there are no open positions, the balance and capital will be equal.
Market purchase price, the price at which the market is willing to buy a certain asset. At that price, the trader can sell the asset. It is displayed on the left side of the quote.
An agent who manages the investor's affairs. Usually, a commission is charged for the service, which, depending on the broker and the amount of the transaction, may or may not be negotiated.
A market characterized by rising prices.
A chart that indicates the trading range for a specific period. It consists of the so-called the body of the candle (the wider part) and the shadow (the lines at the top and bottom of the body). The body shows the opening and closing price for a certain period. If the opening price is higher than the closing price, the body is red (or black). If the final price is higher than the initial price, the body is green (or red). The shadows are at the top and bottom of the body and show the high and low price levels for that period.
An agreement between two parties to exchange the difference between the current value of the property and its value at the time of purchase/sale. It is a product that allows you to realize profit or loss from price movements of financial instruments, without actually owing or owning them.
Exposures in a financial instrument that no longer exist. The procedure of closing a position is the sale or purchase of a certain amount of financial instruments to compensate for an equal amount of open positions.
It refers to the opening and closing of the same position or positions within a day's trading.
Any financial instrument that derives its price from the respective security, index, currency pair or commodity it tracks.
The amount currently held in the client's account is calculated as if all open positions were closed at current market quotations. The account consists of unrealized gains less unrealized losses and plus/minus storage.
Fulfillment of buy or sell orders on behalf of a trader by an intermediary.
Analysis based on economic and political data with the aim of determining future trends in the financial market.
An obligation to buy or sell a commodity or financial instrument at a specified price on a future date.
The practice of undertaking one investment activity to hedge against the loss of another investment activity, eg short selling to reverse a previous purchase or long buying to offset a previous short sale.
When a private company first offers shares to the public on the stock exchange.
The ability to control a large amount of money with a small initial investment.
A limit order is a pending order that is executed as a market order after a predetermined price level is reached. A limit order can open a new position (limit entry order) or close an existing one - at a predetermined price or better (limit-take profit order). The buying level is limited below the market price, while the selling levels are above it. Therefore, limit entry orders are usually placed if the market price, after rising or falling to a certain level, is predicted to reverse its direction and decrease or increase.
The position of buying a certain financial instrument with the expectation that its value will increase.
Standardized amount of financial instruments. It usually represents the minimum order amount.
The minimum margin balance required to maintain the client's open positions.
The minimum amount of funds required in a trading account to open positions.
The percentage of the price of a financial instrument that the client must cover with his own money in order to open a position in that instrument.
Margin trading is trading using a security deposit of money that serves as collateral and is kept in the client's trading account. Margin is defined as a percentage of the total trade value; for example, the 1% margin for a $1,000 position is $10.
An order executed at the current market price, the moment you decide to buy or sell. You will receive the best available price at the time of execution.
The value of financial assets determined at current market prices that the client would receive if all positions were closed immediately.
Any agreement not concluded with an equal and opposite agreement.
A charge made by the broker for keeping the position open overnight. It is also known as the "overnight financial cost" and is linked to the interest rate of the respective currency. It is an interest payment fee to cover the cost of the leverage you use overnight.
Buying or selling financial assets between the hours of 9:00 a.m. and 8:00 a.m. the next day.
An over-the-counter market, without a physical location, where market participants trade directly with each other through various electronic trading systems.
Order placed and waiting for execution. It is an instruction ("order") set by the trader to open or close a position when a certain "target price" set by the trader is reached.
The smallest movement in the offer of the currency pair.
Closing a position to make a profit.
The money that some brokers charge for their services.
The last price at which a financial asset is traded or the last price at which a buyer and seller agreed to transact the asset. The bid or ask quote is the most current price at which an asset can be bought or sold.
An amount equal to or greater than the required initial amount (Margin Requirement) less unrealized losses, plus unrealized profits, provided that the total amount is not less than 30% of the required initial amount.
Identifying, analyzing and accepting or neutralizing risks that threaten profitability. When it comes to foreign currency, it includes, among others, market, sovereignty, country, transfer, delivery, credit and counterparty risk.
A short position is the sale of a certain financial instrument with the expectation that its value will fall.
The difference between the requested market price and the actual price at which the trade is fulfilled. It is based on two factors, liquidity and volatility. This can occur in rapidly changing market conditions or in markets where liquidity is lacking.
The difference between the purchase price and the sale price.
Spread betting refers to speculation about the direction of the financial market without actual ownership of the respective security.
A stop loss order is a risk management tool to help protect against large losses if the market moves in the opposite direction of an investor's trade. It is an order to automatically close a position once it reaches a certain predetermined price that the investor has determined in advance. The stop loss order will remain active until the order is withdrawn or the position is closed.
Market price measurement analysis. In technical analysis, historical price changes are analyzed with the aim of predicting future trends. By studying price charts and a series of accompanying technical indicators, technical analysts in power allow the market to tell them how it is likely to behave. The purpose of mapping the market's price action is to identify trends in the early stages of their development, and then trade in the direction of those trends.
A statistical measure of market or security price movements over time, calculated by standard deviation. High volatility is associated with a high degree of risk.
A measure of the number of shares or contracts that are changed manually during the observed period. Volume behavior is independent of price behavior and can be used to improve your analysis.
Although the popularity cfd trading has grown in the last decade, it can be said that the time is just coming when it will show its real trump cards. As the most dynamic form of online trading today, many will recognize in it what others do not.
To make it easier to understand how cfd works, there are a few basic things you need to learn first through an example.
Now suppose you want to trade 1000 share CFDs (units) AB trading at 25.51/25.52. AB margin requirement is 5%.
You believe that the price of AB will go up and you decide to open a position by buying 1000 CFDs at the price of 25.52 (buying price on the right). As the margin requirement is 5%, your position margin will be 1276$ ((1000 (unit) x 25.52 (purchase price)x5 % margin))
The price will increase in the next 5 hours on 26.01/26.02. You decide to close the position by selling at the price of January 26. The price has now increased by 49 cents in your favor (26.01 minus 25.52) resulting in a 490$ profit (49 cents1000 units).
The price falls in the next 5 hours on 25.01/25.02 and you decide to close the position to avoid further losses and sell it on 25.01. The price has now dropped by 51 cents (25.52 minus 25.01) and you lose 510$ (51 centsx1000 units).
You believe that the price of AB will go down and you decide to open a position by selling 1000 CFDs at the price of 25.51 (the selling price on the left). As the margin requirement is 5%, your position margin will be 1275.5 $ ((1000 (unit) x 25.51 (sale price)x5 % margin))
The price falls in the next 5 hours to 25.01/25.02 and you decide to close the position by buying at the price from 25.02. The price has now increased by 49 cents in your favor (25.51 minus 25.02) resulting in a 490$ profit (49 cents1000 units).
The price will increase in the next 5 hours on 26.01/26.02. You decide to close the position to avoid further losses and buy it for 02.26. The price has now dropped by 51 cents (26.02 minus 25.51) and you lose 510$ (51 centsx1000 units).
As you have seen in the examples, even the smallest change in the price of an asset, even a few cents, has a huge impact on the outcome of your trading. And that's exactly where the advantage of cfd trading lies! While you only pay a margin call and control the full price of the asset, with cfds your knowledge and skills are rewarded to the maximum. And since the market is very large, we are sure that you will find a place where you will get the best out of it, regardless of which area you are most skilled in. Although trading different types of cfds may require a different approach, understanding the basics will surely be enough to make it easier for you to trade wherever you choose. So pack up, choose a broker and start trading now.
The first and most important item that your choice of the best broker should definitely satisfy is security. As the global forex market is decentralized, it is not controlled by any central agency or country or jurisdiction. That is why it is very important that there are regulations that control the business conditions of each broker by monitoring their work on a daily basis. Regulators popout, CySEc, FCA, ASIC, CySec, MiFID and others deal with traders in case of inconvenience and disputes with a cfd broker. If your broker isn't regulated, it's very likely a scam and you shouldn't be doing business with them by any chance.
Although most of the top brokers offer more or less similar products and conditions, there are definitely differences between them. Depending on the affinities of their clients, different brokers offer different products at different prices and conditions in order not to take their place as favorites for certain services and types of cfds. Each broker offers its own type of cfd on its own terms. Some offer better prices on stocks and some on currencies. No one is perfect in all fields, so think carefully about which field suits you best and choose your favorite accordingly.
Although they look almost identical at first glance, trading platforms differ from broker to broker. Most of them use already verified ones MT4 and MT5 Platforms, while some have developed their own or third-party platforms. Some are more complicated and comprehensive and therefore intended for experienced traders, the rest are for more basic and simple application. Most offer the same basic tools, but each has something extra to offer. Explore their options.
It is easier to make gains if the trading portfolio is very good. However, most traders do not have substantial sums of money or do not want to risk too much but would definitely like to try their skills in CFD trading. Then the minimum deposit of €1,000 sounds scary. Fortunately, although there are premium and vip accounts for the daring ones, most top brokers offer initial roles from €5 to €100 in order to attract as many clients as possible. Also, there are demo accounts for practicing with virtual money. When making payments and withdrawals, it is important to pay attention to the time required to process transactions and payment methods.
Heroes are known in hardship. It's easy to promise hills and valleys and be of service when everything is going well, but what about when things go downhill and you need help. It's nice to know that your broker is always there for you in case you need something and that you have someone to turn to for help. Quality customer support should be a very important item of every top broker.
About 5 trillion dollars worth of currencies are traded daily, making the Forex market the most active in the world. For those who like to invest and manage their own money, avoiding unreliable intermediaries who often take large commissions and often prove to be insufficiently expert in their profession, this is the ideal place to invest. If CFD trading sounds like a good idea to you, the most important step is definitely finding the right Broker. However, choosing the right mediators is not an easy task at all. In addition to the rapidly growing trend of online trading, the Internet is today flooded with various scams that are very easy for an insufficiently skilled individual to come across. If you want to trade, but you don't want it to happen to you, you're in the right place! TopBrokeri.com
When we have a large market, such as the CFD market, an individual, no matter how good he is, cannot predict the movement of that market. With all the variables constantly changing and influencing each other, not even a super computer would be able to calculate exactly where the market will move. That being said, you have to be aware that sometimes your predictions will also go in the wrong direction. But that should not scare you. It just means that you will have to develop your own trading strategy regardless of the fact that the predictions may not be in your favor and you will have to stick to it. We bring you a couple of basic methods.
As the CFD market offers a variety of trading options, it's easy to want to try something new. However, it is very important to stick to familiar ground until you have enough experience. This way you can learn tricks more easily before you're ready to move on.
Insisting on one strategy, if the predictions are not in your favor, is not a smart thing to do. But changing your strategy according to every little thing that didn't go according to plan is much worse! If you have a well-developed strategy for each situation, no matter what happens in between, it will prevail in the end. Maybe sometimes it won't go as it should, but it's definitely better to have a solid strategy than to constantly change it.
The most common mistake most people make is to invest a lot of money in order to make a big profit. Cfds are the best for big profit, no doubt about it! But if the predictions go against your benefit, then you can lose more than you invested. No one is born learned, experience is important and experienced and successful cfd traders know that they are much better when you take it slow.
When trading cfds, the market can sometimes be stacked against you. Always provide two exit points. One when the market is in your favor, and the other when it is not. In this way, you can balance the market portfolio and not let the losses make a strong impression on you.
Be disciplined and resist the temptation to buy or sell too early. You will decide in advance at which price you will trade and wait for the price to reach that level. Never change strategy lightly!
Although you can make much bigger gains with leverage than with any other trading instrument, no one has achieved this overnight. Every successful individual took small steps by setting short-term goals. Never eat more than you can chew or the trading experience will be bitter. You are more likely to achieve your goals through many smaller but successful wins than one spectacular win.
Whenever you open a position, remember to set a stop loss appropriately, as this helps protect your capital. If the market goes against you, be disciplined and don't move that limit trying to get out, because that can end badly.
The hardest thing about cfd trading is knowing when to let the profits run their course. Of course you will want to get the most out of a profitable trade and if you take that profit too early, you can avoid possible bigger profits.
Although there are many ways to reduce trading risk, "diversification" is the easiest. Never invest everything in the same sector. In case that sector suffers losses, you can lose everything you have. By separating investments into different sectors, you are less exposed to losses, because then the loss affects only a certain sector while others remain untouched.
The CFD market, like any other, is subject to change. Don't let every change, especially a bad one, turn your world upside down. Always stay calm, follow a strategy and don't let your emotions take over and prevent you from achieving your goal.
All these remarks will have no value if you do not follow one main rule – choose a broker wisely! And since TopBrokeri.com selects only the best CFD brokers for trading, you can relax. Choose your favorite and immediately start using the learned skills.
Every investment, no matter how safe it is, carries a certain risk. No matter if you want to invest money to make money, there is no such thing as safe money and every experienced trader knows that. Especially if it is about market investments. The CFD market is no different. As contracts for difference are a derivative product with the ability to mirror and apply to almost all markets, the cfd market has become huge. Logically, as the size of the market grows with all the variables and factors involved in it, so do the potential gains and losses. We all know that there is no risk of winning, that would be absurd... But, when it comes to losing, risk is something you need to keep in mind as well as the importance of controlling it.
As cfds are leveraged, any potential profit (and loss) is magnified, making them potentially very risky. The more you can gain or lose - the greater the risk. No matter how good you are, you cannot make risk disappear entirely. But what is definitely in our power is that when a negative trading outcome occurs, it does not leave a big impression on the trading portfolio. Of course, luck can serve us once or twice, but if we aim for long-term success, without the right trading strategy it is very difficult to do so. Cfd risk management can help you a lot in this. There are usually 3-4 ways to control risk, depending on which CFD broker you choose.
Standard Stop Loss orders are used to reduce the risk of trading, in case the market does not favor you, in such a way that trading is automatically stopped when the so-called limit is reached. a trigger that you set yourself. Let's say you opened a position by buying 1000 barclays cfd at 2200p. You have calculated that 2200p is the maximum loss you are willing to accept to control your risk, and set 2000p as the value (trigger) for further losses. Trading is automatically terminated when Barclays CFDs reach 2000p, all to prevent losing more money than you can afford.
To prevent the market gap from affecting your risk control, there are Guaranteed stop loss orders. In contrast to standard loss orders, guaranteed loss orders guarantee the completion of trading at the values that you have set yourself as a limit, regardless of market volatility and market intermediate space. Although they sometimes carry a small premium, they are certainly the most effective risk control tool available.
To protect your profits that you think might go lower, profit target orders immediately sell your traffic when it reaches the level you set as a trigger.
As you can profit with cfds even when the market falls, they can be very useful as a tool to ensure that the balance in the portfolio will be maintained. Let's say you have a long-term portfolio that you would like to hold. When the value of your portfolio goes down, you lose too, with cfds you mitigate the loss by opening a downside position. Therefore, by using cfds, hedging your positions and neutralizing losses, you turn the market decline to your advantage.
The great thing about cfds is that you can fully control your risk, because risk control, as a basic part, is included more or less in the service of every better cfd broker. This means that you can always control your losses and stop them before they make too much of an impression on your portfolio, regardless of market changes, even when the odds are not looking good.
You just have to make sure that your losses never exceed your profits! With our selection of only the best CFD brokers, we'll make sure your risk always stays under control.
Given the variety of trading instruments available today, which at first glance appear to be the same even though they offer different trading options, it can be very difficult for an individual to find the model that suits them best. To make your job easier, TopBrokeri.com brings you a direct comparison of cfd trading and binary options.
Both cfd trading and binary options offer the opportunity to profit from rising and falling markets, and access to a large number of markets. By mirroring the assets they track, both are derived products and enable trading without real ownership, so they are exempt from taxes and other duties. Since you don't need to have a large amount of money to trade, they are easily accessible to a large number of people. Both online trading methods provide the most polished risk control tools available at most top brokers.
With binary options, the expiration date is predetermined. Thus, they always have a fixed amount of risk per contract, which means that the individual always knows how much the losses are and how much the profit is. If your predictions are wrong, you only lose your initial deposit. But, if they are correct, the return on investment can never exceed 100% of the initial deposit, thus making binary options safer, but less profitable.
With cfd trading, you close the trade when you think it's best, without expiration. Under the influence of leverage, they are strengthened, and your gains are multiplied. This means that your investment can go up to 500%! But unlike binary options where losses are equal to the initial deposit, losses in cfd trading can be higher than the initial stake. This makes them riskier, but also more profitable!
Both cfd trading and binary options offer you the possibility of small stakes and diverse markets and thus allow you to use your knowledge and skills in the best possible way. Both involve investing money behind predictions to make a profit and are without a doubt the best at it. This makes it very difficult to say which one is better.
The easiest way to decide on a type of trading is to choose the one that meets your needs. If you are the type of trader who likes to play it safe, have fixed risks and use your trading skills as passive income, then binary options trading will definitely satisfy your appetite.
But if you want to play more dynamically, control risks in order to profit and use your skills and knowledge where they will have the greatest impact then cfd trading has no competition. No trading tool offers as much momentum as cfd trading.
The main difference between these two trading instruments is that binary options provide a safer approach by limiting profits and losses, but also by limiting the earning potential. This means that no matter how good you are, your profits will never be too big. The great thing about cfd trading is that you are not limited in any way. If you want to play safer like with binary options, you can. You just need to manage the risks differently.
In other words, binary options will never be able to rise to cfd trading, while cfd trading can always descend to the level of binary options.
Almost everyone knows about Forex trading. All other instruments came from forex trading, including cfd trading. It is hard to imagine that any other online instrument is as popular as Forex. However, in recent times, cfd trading has come seriously close to it, and many believe that it could completely replace it. The best way to check this is to compare them directly.
Cfd trading and Forex trading have a lot of similarities. It's easy to get in and out when the market goes up or down. In both cases, you do not own real property, so they are exempt from taxes, surcharges and other similar charges.
Forex (Foreign Currency Market or FX) is a global currency trading market and offers pure currency trading; US Dollar, Euro, Japanese Yen, British Pound, Swiss Franc and Australian Dollar. These seven currencies occupy 85% of the Forex market and are called major currencies. When you trade forex, the price of the transaction is based on the spread (the difference between the bid and ask price) that is determined by the broker. Although each broker has its own quota, the general factors that determine prices globally are employment transfer, interest rate, inflation, public debt and so on.
Unlike Forex trading, which is limited only to currency trading, there are no limits in CFD trading. If you like forex, trade forex cfd; if you prefer commodities, you trade commodity cfd; everyone knows about stocks - try cfd stocks, cfd indices, cfd options, gold, oil, gas and much more. Everyone is at your disposal 24/7! Given the size of the market, it's just up to you to find what you're best at. Use your knowledge and skills anywhere and anytime!
Another thing that differentiates forex from cfd trading is the factors that affect the market. Factors that affect Forex are based on politics and economics, while CFDs are mostly affected by changes in business trends or simple market forces (supply and demand). Also, cfds are less complicated and therefore the possibility of speculation is reduced.
It may be an exaggeration to say that cfd is a better way to trade than Forex, but few can provide objective arguments to disprove this. The main and only reason why Forex trading is still the number one online trading instrument is because he was the first in the business, long before others. Because of this, Forex is not popular because it is the best, but because it is the oldest. CFD trading offers what Forex does with the addition of everything else.
Given that we live in modern times when the Internet is the number one tool for almost everything, it's no wonder that online trading has become the most popular trading tool. As the originator of modern trading, CFD trading quickly gained global popularity. More and more people around the world who decide to trade online are favoring CFD trading. But unfortunately, sometimes online trading is compared to gambling, especially with CFDs where you can make a lot of money overnight. So the question arises: "Is CFD gambling?".
Let us answer that question for you.
If you decide to engage in CFD trading, reading CFD articles you will come across countless articles that indicate that CFD trading = gambling. The claims that justify this are closely related to the nature of CFD leverage and the fact that it can either greatly multiply your gain or your loss to such an extent that the loss can exceed the initial deposit and thus you can lose much more than you invested. True, CFD leverage can do that. Does this mean that CFD trading is gambling? NO, of course! And here's why...
Imagine if popular sports cars like Lamborghini, Porsche, Ferrari, and others suddenly became available to everyone! Regardless of how much money, or what is even more important, how much experience one has in driving such a car, anyone can own and drive it. Because they are extraordinary! Everyone would like to drive them, right? Drivers who already have experience driving such a car will tell you that no other car can surpass the speed and quality of these cars, as well as their safety. It is the same with CFD trading in comparison with other trading instruments.
However, there are more inexperienced drivers who would like to drive a fast sports car and now they can finally do it! Given that they don't know how to drive such a car, it will surely end badly. Soon all newspapers will write about how sports cars are dangerous and how every drive in them is a gamble with life, equating them to gambling. But in the wrong hands they can be really dangerous. It's the same with these CFDs...
But everything is fine with the car, it's perfect! It is the driver who should be blamed. He's the one who didn't pay attention to how fast the car could go. If he knew better what he drives and how to drive, then he would have the same opinion as experienced drivers. Sports cars are the best, and the safest! But in the wrong hands they can be very dangerous. It is the same with CFD leverage. CFD leverage is a great thing. It allows you to "manage" a much larger amount of money than you normally can, as if you could buy a sports car for $10. How you can get the most out of it depends on how good you are. If you misuse the advantages, it will surely end you badly, saying that CFD trading is as dangerous as betting.
But if you choose your strategy carefully and trade safely until you get up to speed, CFD trading will surely be the best experience of your life because they are the best of online trading! If you put things this way, you cannot say that CFD trading is gambling! Because it really isn't. Inexperienced marketers make it look that way.
www.topbrokeri.com is here to select only the best CFD brokers for you and to prove to you that CFD trading and gambling are not the same thing. With all the support for clients (CFD risk control, CFD strategy...) that CFD brokers offer you to teach you how to trade, control risks and benefits, we are sure that you will see that CFD is not some kind of dangerous gambling but a serious game for serious people.
CFD or Contract for Difference is a financial tool that was created in the early 1990s as a means of insurance against negative market movements. The initial idea was to neutralize the risk of stock losses. As CFDs had small initial stakes, were tax-exempt and did not require physical ownership, they were a favored financial tool. In the late 1990s, with the general rise of online trading, brokers embraced them as an important new financial tool. Thus, traders were able to trade stocks, commodities and indices with the click of a mouse, which they did not have access to before. The new marketplace was soon presented to retailers worldwide and, due to its simplicity and availability, soon became very popular among online merchants. Today, their share in the online trading industry has become astonishing and many experts believe that CFDs will become the number one market instrument in the near future.
Basically, a CFD is a contract (agreement) between a buyer (client) and a seller (broker) on the exchange (payment) of the difference between the open (current) price and the closed price (at the expiration of the contract). As CFDs are financial derivatives, they mirror the movements of a particular asset allowing trading without physically owning the asset. In this way, you do not have to pay the costs of a physical partnership (such as management fees and taxes).
Unlike stocks and other similar instruments where you can either profit if the price rises or lose if it falls, with CFDs you trade and forecast price changes regardless of whether they fall or rise. If you think the company or market will suffer losses in value you can use cfds to sell them today and your profits will grow with any drop in price. This is called "going short". On the other hand, if you believe that the company or the market will suffer an increase in value, use cfds to buy ("going long") and your profit will increase along with the increase in price.
The main advantages that put cfds at the top of the online market industry is definitely the way they work. Margin, or the minimum amount of money you need to put as a deposit to open a position and start trading, generally varies from 2% to 20% of the asset it mirrors, providing the opportunity to gain an amount of market exposure by investing a small amount of the total trade value. Thus, with a small amount of money, you open a position much larger than the amount you had to invest, which greatly increases your potential gains. But they also multiply your losses as much as your gains. However, by choosing the right cfd trading methods that most of today's top brokers offer, your losses should not outweigh your gains and you will always keep things under control.
The CFD market offers global market opportunities. CFDs on Shares, Indices, Valts, Cryptocurrencies, Commodities, Stocks, Options, ETFs and others are popular. Such a large selection that the best brokers provide ensures flexibility and is great for both beginners and experienced traders. Their main difference is in the type of financial assets they mirror. It's just up to you to find the one that suits you best.
In the end, CFD trading is all you need if you want to use all your knowledge and skills where they will matter most! That being said, the most important step in a successful trading career is choosing the right broker. With TopBrokeri.com, it's up to you to choose the one that best suits your experience and trading style and start trading today.
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