Finance

Why Is CFD Trading So Popular?

Just this week, broker Core Spreads launched a new affiliate program, letting partners earn a capped commission rate. Besides indicating that Core Spreads is doing fine, this shows us how popular and successful CFD trading has become in recent years.

Trading is still a gray area to many, and the benefits are even more so. Just as people are afraid of the unknown, many will be reluctant to place any cash in a declining market, or a market they know nothing about. CFD trading makes both these issues much easier to handle, and as such, could be right for a brand new investor, or learning trader.

So, if you’re considering joining the game, here are some of the main reasons why CFD trading is so utterly popular.

Make profit in any market

Source

Gone are the days when you absolutely needed a rising market to make a decent profit. With CFD trading, you can make profit in a declining market by selling short that particular CFD. This kind of trading rewards strategy, critical thinking and a keen eye. It’s not potluck. It’s careful thought and planning.

The same goes for a booming market, too. You can make hefty sums of cash by buying that CFD. Of course, making profit in a rising market will always be easier than a declining one. But in CFD trading, it’s irrelevant. You can thrive in any scenario. Other forms of trading usually rely on a successful market, and only money can make money. You can now dispel that notion!

It’s convenient, and simple

Source

And that’s an understatement. If you’re already trading forex, it will be quite simple for you to trade a range of commodity CFDs on the same platform. The tools and software are largely the same and have similar functions. It’s not like CFD trading will feel absolutely alien to people who have traded in the past. It’s still an easy process.

Plus, it’s never been quicker and easier to get started with your trades. Most platforms are designed with this idea in mind, in order to aid usability. Many thoughts in the Plus500 review, for example, encompass this notion about that platform. Of course, if you’re new to trading, you still have a long way to go, but once you’ve learned it will be easy to jump between commodities.

Less ownership and commitment

Source

There’s no fixed lot size when trading CFDs, so you have more options in terms of scale. Also, to begin a trade, you must only put down a small amount of the value of that total trade. You won’t need to account for the total cost. You’ll have more flexibility with your trades, and can be frugal where necessary.

Additionally, you aren’t required to own the commodity being traded. CFD traders aren’t at risk by taking ownership of any form of physical instrument. CFD is the representation of the commodity, if you will.

So, in short, CFD trading is a much more flexible option for those that desire it. It’s more secure, and carries less risk. Does that mean there’s less chance for greater profits? Maybe. But where certain trades can result in a heavy drop, CFD allows you to be more frugal, and more protected.

Dana R

"You can have everything in life you want, if you will just help other people get what they want."

Recent Posts

Donald Trump and Elon Musk Celebrate Election Victory at UFC 309

Image source: Wikimedia Commons President-elect Donald Trump celebrated his election victory at the Ultimate Fighting…

5 days ago

White House 2024: Donald Trump Wins, Kamala Harris Calls Him to Concede Election

Millions of voters across the US chose to return Donald Trump to the White House…

2 weeks ago

Who Won? Donald Trump Declares Victory as He Addresses Jubilant Supporters in Florida

Donald Trump declares victory in the US election as he addresses jubilant supporters in Florida.…

2 weeks ago

Stocks Soaring as Donald Trump Closes in on US Victory

Stocks around the world are rising as Donald Trump appears to be on the cusp…

2 weeks ago

Who Won? Kamala Harris Cancels Election Night Party as Path to Victory Narrows

Donald Trump has won Pennsylvania, North Carolina and Georgia and taken a lead over Kamala…

2 weeks ago

Quincy Jones Dead at 91

Quincy Jones, the celebrated musician and producer who worked with Michael Jackson, Frank Sinatra, Ray…

2 weeks ago