WHAT IS CFD TRADING AND HOW DOES IT WORK?

Contract for difference (CFD) refers to a contract between two parties in a trade. This contract is derived from an underlying asset, and traders do not own the said asset.

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What is CFD trading?

Concept

Contract for difference (CFD) refers to a contract between two parties in a trade. This contract is derived from an underlying asset, and traders do not own the said asset.

  • Forex

  • Indices

  • Commodities

  • Shares

Advantage

Compared with traditional finance markets, CFD trading has many advantages. Traders can trade anytime, anywhere they want.

  • 24-Hour Trading

  • Global Markets

  • Low Initial Capital Requirement High Leverage

  • T+0 Settlement

How to Trade?

CFD provides the opportunities to gain potential profit from going long or short.

when you are speculating the gold price may rise, you could buy gold CFDs. If the market price meets your expectation, you may profit from the price rising. This process is called ‘going long’.

On the contrary, when you are speculating the gold price may fall, you could sell gold CFDs. If the market price meets your expectation, you may profit from the price falling. This process is called ‘going short’.

How Leverage Works

By trading with leverage, you don’t have to deposit the full amount. You can trade the financial instrument by only depositing a certain amount of money as margin based on the specific leverage ratio. However, please be noted that leverage amplifies both your potential profits and losses.

Trading Cost

Risk Warning

Risk Management

By trading with leverage, you don’t have to deposit the full amount. You can trade the financial instrument by only depositing a certain amount of money as margin based on the specific leverage ratio.

Take Profit/Stop Loss

After setting Take Profit/ Stop Loss, your positions will be closed according to your target price in normal circumstances, so as to lock in potential profit and limit potential losses. (Except situations where gaps occur, then position will be closed at the next favourable price level).

Trailing Stop Loss

After setting the number of pips using ‘Trailing Stop Loss’, it will automatically adjust the stop-loss price without having to monitor the position, helping you to maximise potential profit and minimize potential losses. (Except situations where gaps occur, then position will be closed at the next favourable price level).

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