Portal Industrial Cartagena Colombia - Forum - Contacts

Contract for Difference trading, otherwise known as Trade CFD cryptocurrencies, is a method that enables individuals to trade and invest in an asset by engaging in a contract between themselves and a broker, instead of opening a position directly on a certain market. The trader and the broker agree to replicate market conditions and settle the difference amongst themselves when the position closes. CFD trading offers many advantages that don’t exist with direct trading, such as access to overseas markets, leveraged trading, short (SELL) positions for assets that traditionally do not offer that option and more.

Traders choose an asset offered as a CFD by the broker. It could be a stock, an index, a currency or any other asset that the broker has in their selection. Traders open the position and set parameters such as whether it’s a long or short position, leverage, invested amount, and other parameters depending on the broker. The two engage in a contract, agreeing on what the opening price for the position is, and whether or not additional fees (such as overnight fees) are involved. The position is opened and remains open until either the trader decides to close it or it is closed by an automatic command, such as reaching a Stop Loss or Take Profit point or the expiration of the contract.

If the position closes in profit, the broker pays the trader. If it closes at a loss, the broker charges the trader for the difference. Although it seems so, there is sometimes some confusion between CFDs and ETFs, or exchange-traded funds, which are completely different financial products. Trading digital currencies with CFDs introduces you to a variety of risk management techniques, including taking profit and stop loss tools. Such advanced technical instruments protect you against significant losses and also help you make informed decisions that improve your trading performance.