07:22 AM, 02 Mar 2024 (AUS EST)   The market is currently closed       

CFD Trading: Learn how to trade CFDs

You've heard how Catherine Davey turned $13,000 into $30,000 in 3 months and how a former school teacher, Will Kraa pulled in $65,000 in one week, both by trading CFDs. So what are CFDs and is it really possible to achieve these superior returns?

CFD’s, or Contracts For Difference, is one of the fastest growing investment products in Australia. Large investment firms and individual traders alike are flocking to this highly leveraged means of trading assets. CFD’s have been in existence since the 1990’s, and as ‘over-the-counter’ investments in Australia since 2002. In late 2007, the Australian Stock Exchange (ASX) gave increased legitimacy and availability by creating exchange traded CFD’s.

But what exactly are CFD’s? What cautions should be heeded with this relatively new trading vehicle? What should an investor know before trading with CFD’s? This article series will consider the following aspects to CFD’s:

Just because many investors are profiting and trading this type of investment does not mean that you should jump in head first. You will need to exercise due diligence and carefully read the following articles to determine if this highly leveraged speculation is something you should include in your trading portfolio.

Without further ado, let us find out what sort of engine is under the CFD hood.

CFDs Articles

What are CFD’s and why trade them
What are CFD's? Why Trade them? the leverage can be 20 times or greater that of the asset holder. With so many advantages attached with a Contract For Difference, they are definitely worth further investigation.
Direct Market Access (DMA) VS Market Maker (MM) - The Pros & Cons
Two major types of CFD models exist. One is called Direct Market Access (DMA), and the other is termed Market Maker (MM). They each have their own advantageous and disadvantageous. Here are the pros and cons of each
CFD Margin Requirements
Buying a Contract For Difference uses margin to create massive leverage. The two types of margin that exist are initial margin and variation margin.
CFD Trading: Calculating Overnight Interest Payments (Financing fees) with example
Learn how to calculate overnight CFD interest (financing fees) for a long position. If we trade our CFD intra-day, we do not pay financing fees.
CFD Trading: CFD real life examples with calculations (Long & short)
Here are some real life CFD trading examples. First we will examine a long CFD and the finish with a short example where we anticipate a drop in the market.
The Pros & Cons of Trading CFDs
There are many reasons for an investor to trade CFD’s, and a couple of reason why they may choose not to use them. Here are a list of examples. A prudent investor will weigh out the pros and cons of this investment vehicle.
CFD Trading Risks: Learn the risks associated with trading CFDs
Contracts For Difference have some unique risks associated with them, as well as some general dangers common to many investment types. Here are the top 7 risks associated with trading CFDs.
How to Choose the Best CFD Provider for You
No doubt you want the best rates, the most reliable providers, trustworthiness, and a wide range of options on CFD’s. Learn how to choose the best CFD provider for you
CFD Tax Treatment
How Do I Tax My CFD? It is gambling and therefore not taxed? Is it a regular business or is it a capital gains investment? What is the ATO Australia Tax Office ruling?
Top 5 CFD Trading Mistakes
These 5 mistakes are some of the most common ones that many CFD traders make. Avoid these and place yourself in the 10 or 20 percent of traders that are successful.
CFD Trading Example - Flight Centre (FLT)
Here is a recent example of a CFD trade where I made 150% profit in 9 days. The company is Flight Centre (FLT).