GoldenPIPS provides you with one of the best online trading platforms for CFD trading. Through this platform and format of trading, we give you access to hundreds of assets in many financial markets from around the world. You can open multiple positions, take advantage of leveraged trading, and take out your profits through an easy withdrawal process.
We encourage you to look at the multiple trading account types on our ACCOUNTS PAGE and pick one that suits your trading needs the most. However, before you start trading, let us give you a basic understanding of what CFD trading is really about.
The Basic Concept of CFD Trading
CFD trading is a way to speculate on the price movement of an underlying asset. CFDs are contracts between two parties: the seller of the contract and the buyer. The seller agrees to pay the buyer if the price of the underlying asset increases by a certain amount, while the buyer agrees to pay the seller if it decreases by a certain amount.
CFDs are based on margin, so you don't have to own 100% of an asset to trade it. You only need a small amount of money as collateral for every contract, which means you can invest in more assets than you could if you were buying them outright. This allows you to diversify your portfolio without having to commit large amounts of capital at once.
Why Consider CFD Trading
Now that you understand the basic concept, it is important to know why you should go this route in the first place when there are so many other ways to trade. Let’s look at a few reasons you should consider this type of trading.
Access to Hundreds of Markets
CFDs are versatile. You can trade any asset that has a price and volume in an open market. In other words, you can trade anything from stock indices to currencies to cryptocurrencies and even commodities such as gold, silver, or oil.
CFDs are contracts that allow you to trade financial assets without actually owning them. For example, if you want to trade gold but don't have any gold, you could use CFDs to gain access to this market without having to buy physical gold. When you trade CFDs, you're able to take advantage of opportunities that would otherwise be unavailable.
With this kind of access and flexibility in mind, it's no surprise that traders around the world are making use of CFDs in order to diversify their portfolios. Not only does this type of trading allow traders from all over the globe to participate in markets that may otherwise be closed off due to restrictions on foreign ownership laws, but it also allows investors who are interested in protecting their investments against fluctuations in price without having to worry about taking on too much risk (or giving up too many profits).
Big Leverages Available
You can take advantage of huge leverages when trading CFDs. If you are trading an asset like Apple or Amazon, for example, you can use a leverage of up to 1:50. This means that if you want to trade $1,000 into Apple shares, you only need $50 in your account. This makes it easier for traders because they don’t have to worry about keeping a large amount of capital just for their CFD trades.
However, we do want to make sure you know that leverages can go just as much against you as they can go in your favor. It all depends on the result of your trade. If you have a high amount of leverage, then your potential gains are also higher. But there's also the risk that it could go bad for you. If you're going to use leverage multiple times on a trade, then make sure that you understand the risks and rewards of doing so.
No Reason to Own the Asset
Many people believe that in order to trade an asset, you must own it. This is simply not true. Trading one margin, or with borrowed funds, allows you to participate in the market without having to hold on to the actual asset.
It is possible to trade commodities such as gold and oil without owning any of those physical goods. Instead, traders can speculate on the price fluctuations of these commodities by buying and selling futures contracts for these goods. If you want to trade commodities but don’t want to be stuck with a physical stockpile of goods, then trading CFDs is the best way for you to go about it.
That’s what the basic definition of CFD is. You don’t own the asset—you just predict the price of the asset, and if the price moves in your predicted direction, you can hope to collect your profits.
Trade on Increasing or Decreasing Prices
Trading CFDs is a great way to make money in any financial market, regardless of whether the market is rising or falling. When you buy a CFD, you're not actually buying the underlying asset but rather a contract for difference (CFD) with us. You simply invest in the price movement of an asset without owning that asset. With this kind of trading strategy, you can make money when the price moves up or down.
The value of an asset doesn't matter in CFD trading. The only thing that matters is whether the asset will go up or down over time. That's it! So why does it matter? Because when you buy a CFD contract, you're basically betting on whether an asset will go up or down over time. That's it! And if you think about it, there are only two possible outcomes. First, the price moves in the direction you predicted, and you make a profit. The price moves opposite to your prediction, and you lose your investment.
CFD Trading with GoldenPIPS
When you have all the resources from GoldenPIPS available to you, there is no reason for you to fail at CFD trading. With our high-tech tools, a powerful trading platform, and industry-leading trading conditions, you are sure to do great as a trader.