How Trading CFD Online Benefits Investors

Trading CFD online is often presented as a hot opportunity, because it offers affordable leverage. So that small account traders can trade better and with greater flexibility. But leverage alone is not something that will offer you an edge over other traders. In reality, CFDs are much better than other leveraged instruments because they are linear in their pricing. And also because they offer strong one way liquidity. CFD stock traders and investors for example are able to short stocks even when there are short selling restrictions in place. A tremendous advantage over classic stock traders. And this unique provision of liquidity goes a long way, as CFD traders always get a better price, with every trade. In theory, this liquidity is good up to a certain point. FX traders for example using CFDs can enjoy this unique liquidity and enhanced profitability, for trading up to $100 per pip. But $100 per pip is a huge limit, and covers the needs of 99% of retail traders. Online CFD brokers facilitate trading CFD online in the most reliable way possible to this day. Entire CFD trading systems and strategies are focused on this liquidity edge, and can not be implemented using futures or the spot markets themselves. Make no mistake, liquidity is critically important! Moreover, as traders learn to trade better and more selectively, they realize how important trading efficiency is. And good efficiency would still be worth it, even if CFD brokers charged the highest dealing costs and commissions. Retail traders would still be far better off with these brokers than they would ever be with any other type of broker. Futures brokers are the worst solution for retail traders. While futures offer trading on a large, industrial scale, they are only suitable for investment banks. And these investment banks suffer as a result, because their large trading cannot get the best possible market price. And moreover pricing is not linear. That’s the price you pay when you are a supersized trader like investment banks are. And as you can probably guess, these problems of the non-CFD traders become more and more serious as the frequency of trading increases. So retail CFD traders are at a significant advantage — they have an edge no one else has. If the retail trader is bad and they lose money, they will blame the failure on all kinds of factors. But CFDs are not what makes them lose. It’s their bad strategy. On the other hand, retail traders who actually win consistently, having tried everything from spread betting to futures, and finally CFDs, never switch back to these instruments, and stay with CFDs.

Trading CFD Online is Almost Magic

Trading CFD online is so productive in the hands of wise traders, that they never look back. The edge of linear pricing and enhanced liquidity becomes evident in their trading accounts, as trades are handled better, faster, and overall profitability is increased. So is trading online made easy today through the advent of CFDs? Certainly not! CFDs are not about making trading any easier, it’s always down to the individual retail trader to develop sharp trading skills. And CFDs are not a substitute for trading skills! What CFD trading does is enhance the profitability of already profitable traders. But it does it so well, that in some cases the difference made by the superiority of CFD instruments is beyond comparison. CFDs enhance profitability for the retail trader. In ways that primitive instruments could never do.