What an Online CFD Course Has to Offer

An online CFD course offers wide range of guidance to new traders, regarding CFDs and their benefits. These benefits extend to commodity trading and stocks.

What An Online CFD Course Does

An online CFD course is different from a forex trading course, in that it focuses on ways to improve existing strategies. The whole concept is to introduce CFDs and how they differ from the spot market, when trading forex. An online CFD course addresses issues of liquidity, trade execution speed, hedging possibilities and more. It even goes as far as to cover basic concepts in Carry forex trading, where 80% to 90% of the risk can be completely offset. This is achieved through specialized hedging, but this hedging is possible through high exposure to currency commodities. And in turn, nobody can afford to gain high exposure on these commodities, unless they use high leverage and linear pricing. And these advantages are provided by CFDs. It is not obvious at first, but CFDs are not all about leverage, just for the sake of trading one currency or stock more affordably. They are about leverage combined with excellent pricing, which follows the underlying market very closely. They allow you to trade at any time, no matter how strained the market conditions (with spot forex you can’t do this). And the net achievement for Carry traders, is a reduction of risk. This reduction is not on a day-to-day basis, but it is based on correlations between markets. And correlations are valid over weeks and months. Still, significant amounts of funds have to be committed in a Carry trade. The goal is to gain say $300 daily, from the difference in annual interest rates. Daily interest rates are way too small. But given for example a 2% annual interest rate differential over 200 trading days in the year, is equivalent to 0.0099% per business day. Given a $60,000 CFD trading account, with 200% leverage, where 1/3 of the money ($20,000) goes to the Carry trade, the daily gain on the rate differential is around $396! Part of the remaining funds has to go into hedging the Carry trade, price-wise, through some interest free market. Using CFDs and high leverage. The Carry trade concept requires excellent correlation, and maximum risk analysis. But it does work, just look at USDCAD and crude oil, and their medium term inverse correlation. These are the concepts CFD enthusiasts want to know more about. While other old fashioned investors will look at CFDs just for the sake of their tax benefits.

Online CFD Course for Pioneer Investors

Some investors, due to lack of funds, and lack of access to other markets want to take leverage to a next level. Margin trading in general is beneficial, but only when used after carefully checking the numbers. An online CFD course will focus on money management and leverage, though individual investors might want to dig deeper into the potential risks. Forex trading is tricky and one can fall into a trap very easily, if the market is not understood in term of risk. Online CFD trading helps make the whole task easier, by providing better trading conditions and linear pricing. Pioneer investor and traders are willing to take great risks, usually one at a time. Because it gives them the opportunity to explore new trading methods in the markets. But a gear amount of risk can be modeled and predicted before you make the first trade. This is similar to the first flight pioneers: They wanted to explore more but most failed due to poor risk management. Then came the Wright brothers, who had simulated, calculated and predicted flight risk to a very precise approximation. And their concept was successful. It’s the same with financial trading. If a concept is modeled well in simulated trading, it will very likely work in live trading also. But here is the trick, only CFD contracts provide you with all the tools and benefits for accurate risk modeling and accurate implementation.