CFD trading: Tips for getting started

Hardly any other financial system offers the opportunity to return as high returns as CFD trading. The risk associated with this is often underestimated by beginners - especially when they enter the market blindly. Anyone continue reading with who really wants to trade CFDs should at least acquire a basic knowledge and / or know the following:

Caution: CFD trading is highly speculative

CFDs (contract for difference) are highly speculative derivatives. In contrast to classic stock trading, traders do not acquire the actual read more here want product in CFD trading. Instead, they close financial transactions on the price changes of different financial products (eg stocks, indices, currencies, commodities).

Difference contracts are one of the leveraged products, which is why traders have to deposit a security margin (margin) for the opening of a position, which depends on the size of the respective broker. Due to this leverage effect, very large sums can be moved with small inserts on the market. And that's exactly what makes CFD trading so dangerous or risky. Losses can exceed the investment to an unlimited extent and traders are obliged to compensate the trade account again (margin requirement).

Calculation of the lever

One of the most important tips for the CFD trading is the moderate handling of the levers. Who chooses too high levers, will go to a heavenly command with fatal blog link use consequences. To this extent, the lever must be carefully selected. The lever is calculated by dividing the number 100 by the margins set (100 / margin set = lever). Thus, the leverage effect is calculated from the required safety performance. The lower the safety performance, the higher the leverage. The following rule of thumb applies here:

High levers are undoubtedly very tempting. However, it should always be remembered that the lever acts in both directions, in the direction of gain as well as in the direction of loss. In sneak a peek at these guys they principle, the higher the leverage, the stronger the price changes.

Limiting the risk

Part of the risk management consists of the loss limitation by setting a stop-loss at an existing trading position. This stop loss is set to a price mark (stop price) at which a limit appears to be meaningful. When this mark is reached, the stop-loss is executed at the next possible price, thus avoiding further losses.

It is important that a stop loss mark is already set when a position is you can try here year entered in order to smooth a possible loss position when the mark is reached. Traders should stick to this rule to keep the losses down.

Selection of the Underlying

The CFD value is you could check here from derived from the performance of the underlying. The purchase and sale price is provided by the broker (market maker) and not by the exchange. Accordingly, the prices indicated by the broker should correspond to the prices of the underlying instruments traded on the market. Due to the lifting effect too large deviations can have a considerable influence on profits and losses.

When selecting the Underlying, exotic Underlyings should be excluded first. It is recommended to select known values ​​such as the DAX, blue chips, gold or say content oil. Of course, it is also important to provide sufficient information about the underlying value in order to be able to assess the market situation.

Our recommendation:


50 € bonus for your first trade! ► Now redeem BDSwiss Bonus


Select the broker

When choosing the right broker, traders should ask the following questions:

Without a reasonable strategy, trading becomes pure gambling. Beginners, however, do not have to invent a new strategy, as many pre-built strategies already exist. However, these should not be adopted in this way. More importantly, newcomers see look at this also deal with the strategies and also understand what they are doing and why.

If you have decided on a strategy, you can first test it with a demo account, in order to make the best possible trade with real