What if you could trade forex and CFDs from anywhere?

If you are looking to get into trading without buying actual assets, then CFD trading might be just for you. CFDs give you access to numerous markets and can potentially come with more advantages than regular trading.

In this article, we’ll go through the main reasons why CFD trading might be a good choice for you. We’ll also look at how you can trade forex CFDs anywhere, anytime.

What are CFDs?

Contracts for Difference, or CFDs, enable you to trade on shifts in the prices of currency pairs without actually owning the actual asset. With CFDs you don’t need to buy or sell the actual currency but rather speculate on whether prices will rise or fall.

Since the foreign exchange market is constantly and quickly changing, trading CFDs can help in potentially generating revenue from the market going up or down.

Traders open and close CFD positions more quickly than in other types of trading As a result, you can quickly act on any market changes and try to use them to your advantage whether there is an upward or downward trend.

Difference between forex and CFDs

Trading forex and CFDs is not the same thing. If you don’t know the difference between the two, start with understanding how each one works. Below are some key differences:

Forex trading involves currency pairs only. CFD trading, on the other hand, allows you to trade various instruments including gold, oil, indices or shares.

In forex trading, positions are usually measured in standard lot sizes. While these stay the same, the actual value of each trade may vary based on the currency pair. This happens because exchange rates and pip values differ. With CFD trading, the trade size varies based on the asset.

Both CFD and forex trading charge a spread, which is the difference between the buy and sell prices. CFDs however, may also have additional fees. For instance, there might be an extra cost for holding a position open overnight and there might also be a commission too.

Main reasons why traders choose CFD trading.

Trade multiple markets at the same time

One the main reasons traders choose CFDs is because they can trade various markets, like forex, stocks, indices commodities like metals and more, all from the same account. There’s no need to open many accounts or use different trading platforms.

You can find everything in one place. This is ideal for both beginners and traders who want to explore various markets while trying out new opportunities. With CFD trading you may trade gold, stocks and forex pairs at the same time using just the MT4 platform.

Market movement & volatility

The amount that an asset’s price moves up or down is referred to as volatility. When there is a lot of movement in a short period of time, this is called high volatility. CFDs allow traders to trade big movements in prices. Should you catch the right price swing, you may potentially generate revenue in a short time. While volatility makes trading exciting, you need to be focused and ready to react quickly.

High liquidity

How easily and quickly one can buy or sell an asset is known as liquidity. There is usually high liquidity in CFD markets meaning that trades are executed fast and at good prices most of the times. If, for example, the price of GBP/USD drops fast, you can quickly open a sell position with the aim of making a profit, should the price continue to drop. Delays are also reduced due to high liquidity and there are generally lower changes of losing money because of unexpected price swings.

Ability to profit from rising & falling prices

In CFD trading, you can potentially generate revenue when prices are rising or falling. If you believe an asset’s price will go up, you can open a buy position. On the other hand, if you believe it will go down, you can open a sell position. This is helpful if you want to protect your investments as well. For instance, if there is a long trade on EUR/USD and you expect its price to go down, you may open a short trade to minimise risk.

Use of leverage

Leverage allows you to trade a larger trade size with a smaller initial amount. In other words, with leverage you can open larger positions, without the need to have the full amount in your trading account. With $1,000 and leverage 10:1 for example, you can trade as if you had $10,000. This increases your profit potential, but it increases risks as well. So, leverage may boost profits but also losses. With leverage, traders can access markets that they could otherwise not afford, such as gold or popular stocks.

Reduced costs

Most of the times, CFDs are cheaper to trade than other traditional investments. There is no need to buy the underlying asset but rather simply trade on its price. This means that there is no need to pay the whole price upfront but just a small amount, also known as margin.

For example, if the price of a share is $50 and you only have $500, you can only buy 10 shares. With CFDs though you might be able to trade many more with the same $500 because of margin and leverage. Also, a lot of brokers don’t charge commissions and may have reduced fees and taxes compared to traditional stock trading.

Trade forex CFDs anywhere with MetaTrader 4 (MT4)

With MetaTrader 4 (MT4) you have the freedom to trade from anywhere in the world, whether at home or on the go. MT4 is one of the most trusted and widely used trading platforms around the globe. It allows traders to monitor markets, place their trades and manage their account with ease, from their desktop or mobile device. Whether you are trading forex pairs, gold, indices or shares.

MT4 can be downloaded on iOS or android devices, and you can access the platform 24/5. You may watch price movements in real-time, set stop-loss or take-profit orders and execute trades instantly, irrespective of where you are. It’s ideal for those who want to react quickly to market volatility or stay ahead of the global markets throughout the whole day. So, if you are looking to get started with CFD trading and want this flexibility, trading on MT4 is a good option.

Final thoughts

CFD trading offers a flexible way to access global financial markets without owning the actual assets unlike trading. CFDs allow you to speculate on assets’ price movements with the potential to generate revenue whether the movement is upward or downward. Simply put, with CFDs you may profit from both rising or falling markets. Because of the use of leverage, traders can open bigger positions with less initial deposit, although is important to remember that this increases both profits and losses.

CFDs are usually known for being more cost-effective, often come with lower fees and there is no need to pay the full asset value. Traders can take advantage of high liquidity and market volatility, which enable faster execution and more opportunities throughout the day. With MT4, you can trade CFDs from anywhere.

Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced, or hyperlinked, in this communication.