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How to Compare Online CFD Trading Providers

Serious online CFD trading is what all devoted traders want. Because they embrace market risk and profit from it, at times when others don’t even dare to trade.

Online CFD Trading Offers Security and Efficiency

Online CFD trading offers all the security and peace of mind traders need. But also the efficiency that serious traders demand to have. Serious traders are wise enough to know that it takes preparation, patience and selectivity to trade profitably. And trading is not to be compared to a 9 to 5 job. So choosing a CFD broker is just as important to them, as the actual strategy itself. Luckily one doesn’t have to go too far to find out how each broker is rated. All brokers, of all kinds, DMA, ECN, CFD and other types, are rated in online forums, by unbiased traders. DMA and ECN types are used by large size institutional traders. Whereas small to medium size retail traders prefer CFD brokers. Each one of these CFD brokers is impartially rated by real traders. So the trader can look and decide. Different CFD brokers will typically have good ratings, but provide different trading platforms and tools. It is up to the individual trader to decide which trading platforms best suits their needs. A peculiar CFD trading system for example, may in fact require a more advanced CFD trading platform. One that offers more options on contingent orders and so on.

Online CFD Trading Makes the Difference

Online CFD trading has filled the gap that existed in financial trading some 15-20 years ago. Now the small retail trader is actually at an even playing field with large traders, or even has an advantage. More or less, all CFD brokers make this possible through the way they facilitate trading to their clients. Even the worst rated CFD broker is bound to be superior to the average non CFD broker. Exactly because of the trade execution process and efficiency achieved by the CFD infrastructure. Traders will notice that CFD brokers offer all the popular tools, such as CFD trading news. Generally, you don’t need to trade on news, except in the case of specialized commodity or stock trading. Especially in forex, traders are better off ignoring all the day’s news in terms of market direction. And only possibly use them as a way to anticipate and gauge volatility.

Profitability of Actual Trading through Various CFD Brokers

Wise traders are able to profit normally through CFD brokers. Except that dealing costs are much lower, and they get a better filling price on every single trade. So ultimately, their profitability is increased significantly, when compared with non CFD legacy brokers. Profitable CFD trading can be implemented through all brokers, but CFD brokers can enhance profitability by as much as 80%! This is the case in day trading, and is not an exaggeration but actual fact. With legacy brokers, all it takes is few bad fills, or delays, and the profitability for the entire week is 80% reduced! Among all types of brokers, futures and spread betting brokers are the ones where it is most difficult to track the market linearly. Resulting in a poor filling price in every single trade! ECN brokers are the best, but are too costly in terms of spreads and commissions charged. Way too costly for fast trading and even for holding trades too long. CFD brokers provide a perfect alternative to ECN trading. There is absolutely no difference in filling price efficiency, as long as you trade at less than $100 per point / pip. But the dealing and trade holding costs are much lower. That’s why all small to medium size retail traders prefer CFD brokers. Plus, in extreme market conditions CFD liquidity is actually better than even ECN. Moreover, ECN is for forex and commodities only. A good CFD broker offers forex, commodities and also stocks. As many wise traders actually trade few selected markets from each asset category.

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World Events and Online Forex Trading

Online forex trading is much more interesting when one takes into account global events and geopolitics. Rather than just the usual, popular analysis methods.

New, Exciting Online Forex Trading

Online forex trading is much more interesting when using the unique, not repeating impacts of global events. Traders can think like large foreign investors, and look at various forex pairs. It is easier to start with precious metals and energy commodities. As these directly impact some related currency pairs. Other currency pairs are sensitive to smaller and more specific economic zones. And traders can infer a lot of useful information out of global events and geopolitics. So as to make directional trades on all these pairs. It is better to rely on this sort of in-depth fundamental analysis. So that politics and investor sentiment are first taken into account. Followed by objective economic analysis. And this economic analysis looks at more data than just GDP, inflation and trade balance. Traders can learn forex trading this way. And hence they can avoid many false signals that classic analysis methods give.

Online Forex Trading with Confidence

Global events drive online forex trading in various ways. Some of which can be predicted well in advance. Another big advantage of this methodology is that unlike technical signals. And unlike even classic economic analysis, where traders often have to be quick to trade. With global events, a market may be trading in the opposite direction that the one a global event hints to. Thereby giving the trader plenty of time and margin for profit. The trader still needs technical analysis or some kind of clues to be able to specifically time the trend reversal. A wise forex trading strategy is one where a commodity and a related currency pair are used. For example, global impact on gold and crude oil are relatively easy to figure out. Geopolitics, decisions taken by producers and states, as well as technological trends. Can all be used to assess medium term trends in the market. A new invention for example, which makes gold mining and extraction more cost effective, is bound to increase production. And therefore increase supply as well, which means less potential for gold to rally. Which means that AUSUSD will be less strong. So due to all these events, it doesn’t even make sense to compare today’s markets with the markets of 30 years ago.

Other Events

Other events that may impact the forex market are events such as natural disasters. These cannot be predicted. But typically, investors panic during such events, local economies are temporarily ruined, and markets go down. But sooner or later, things start to recover, and investors are back. Natural disasters may cause all kinds of false technical signals. That’s why traders need to know the story behind such market movements. Sometimes it’s local accidents, such as floodings etc. If either a gold mine, or the entire area is flooded, gold production will be suspended for quite some time. And gold may react to that. But it doesn’t mean that gold has started a solid rally…

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How Does Oil Affect the Market and Online Forex Trading?

Crude oil directly impacts the Canadian dollar. So entire online forex trading strategies can be based on Canadian dollar crosses, and especially on USDCAD.

Online Forex Trading of USDCAD

USDCAD is a nice pair to trade. All wise traders who trade this pair, pay close attention to crude oil trends. And to some extend, to the US dollar. However, crude oil itself is the main driving force. And because it’s a highly technical market. USDCAD being strongly and inversely correlated to crude oil, it tends to also exhibit strong adherence to technical analysis. Technical analysis doesn’t make it easy to predict either one of these markets. But basic tools such as LSS support and resistance levels seem to work quite well. Trading USDCAD is different to other forex strategies, in that the trader cannot afford to ignore the related commodity. There are pairs out there that are not strongly correlated to anything else. And even gold, is not as strongly correlated to AUDUSD in the near term. But USDCAD and crude oil are strongly correlated. And is a very useful idea in online forex trading. As commodity pairs produce more solid price moves than other pairs.

How Crude Oil Impacts the Entire Market Across Online Forex Trading?

Other currency pairs are impacted to some degree by the Canadian dollar, or crude oil itself. But fundamentally, all oil importing and exporting countries are impacted. Russia and Canada are only two of these countries. Crude oil also impacts the US dollar through complicated, indirect ways, since the stock market itself is impacted. Generally, crude oil prices of around $40 are regarded as cheap by the market and the economy. And stock market movements tend to correlate with crude oil price, all the way up to around $60- $70. Then, at levels of $100 or more, the stock market regards crude oil as becoming or already being too expensive. And a negative correlation develops. This peculiar reaction of the stock market affects different currency pairs, in different ways. But the market as a whole also matters. When stocks are cheaper than some particular currencies, they are bound to attract more foreign investor money. And the reverse is also true. Online forex trading is really a global game, part of the greater financial markets. And the goal is to detect the next discount. Where some investor or country gets a better deal. Crude oil does impact stocks, and stocks impact some currencies. Traders can learn forex trading this way, and focus on the week to week and month to month trends.

Crude Oil is Slowly Becoming Redundant

Unlike gold, which is impossible to make synthetically, and has unique applications. Crude oil is not unique, and is slowly becoming redundant. Therefore its impact on the stock market, is expected to weaken over the coming decades. The correlation to the Canadian dollar is expected to last for many years. Unless other oil reserves around the world become cheaper to tap. For now however, things are unlikely to change overnight. So traders can safely trade upon these concepts.

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The Rules of Online CFD Trading in Today’s Economic Climate

Online CFD trading is perceived as having limitations and problems. The fact is that it has very few limitations and problems and only at very large trade size.

Online CFD Trading for Retail Traders

Online CFD trading to retail traders, is very powerful. And it has almost no limitations. As all the key CFD benefits are always there, while trading at less than $100 per point. Which is a massive limit for all retail traders. Profitable CFD trading has no rules and limitations. And no single rule in trading is really seen as a rule. Since it can be bent or broken if the situation requires doing so. Online CFD analysis takes into account the latest market data, such as volatility and price patterns. All classic rules, if necessary, can be broken. Profitable traders may for example add to losing trade, or go against the trend. Classic trading rules are useful, but they cannot apply to the markets in a simple way. The concept of a black and white world and sets of absolute rules is totally naive. And only lawyers and judges work by their book. In all other professions, rules can be ignored, bent or broken. In the real world, rules are broken all the time out of necessity. Doctors and surgeons for example, when off duty, and faced with a high risk medical emergency, know no rules. So instead of calling an ambulance, they will improvise and operate on the patient, right on the spot. That’s the nature of the real world, and determined people know no rules. When it comes to CFD trading, rules apply most of the time. But wise traders do break these rules when needed.

Today’s Economic Climate and Changing Financial Markets

Online CFD trading continues to excite traders. Because it offers them unique access to these markets. The markets do change and react to geopolitical events. But markets are made to deal with risks and uncertainties. Markets are changing, currencies and commodities change over time. Though the ones that have quality and a reputation will always be around. The biggest change recently was the advent of cryptocurrencies, such as Bitcoin. A currency which experts believe will become a solid, reputable market to trade. Just like the US dollar is today. Bitcoin breaks no fundamental numismatic rules, and it seems promising. More so because it keeps on recovering from every single price crash.

Online CFD Trading and Cryptocurrencies

CFD trading will be made fully available on cryptocurrencies. Because these cryptocurrencies, will eventually become normal. And will be accepted globally, as a means for doing global trade, on any scale. CFD trading platforms will facilitate cryptocurrency trading. And this is expected to make the world better and more efficient. Trading liquidity in established cryptocurrencies will increase. As will people’s trust. And many more people around the world will be involved in specialized commodity and currency trading. If Bitcoin does become the currency of choice for people transferring money between countries. It will help save entire billions of dollars in bank wire transfer fees. And Bitcoin will become to money transfers, what the US dollar is to crude oil today.

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Day Trading and CFDs – The Facts of Online CFD Trading

Online CFD trading enables many wise traders and classic investors to reduce volatility in their stock portfolios. And to also profit from tiny market moves.

Online CFD Trading Offers More

Online CFD trading offers more to traders and investors, much more than any other trading instrument. To those that know what they are doing, and how to handle market risk, CFDs are priceless. Of course, there are many less experienced CFD traders who are losing money. But even when one is losing money is still better off with CFDs. Even the worst traders out there. Because they would be losing more and faster, had they been trading through other instruments. And this is has to do with the superior liquidity and linear pricing of CFDs. Even in a losing trade, on average, you lose less than you would through any other instrument. That’s the harsh reality of financial trading. Markets are tough to beat, most traders lose, or simply struggle too much. The trading efficiency of CFDs cannot make you a winner overnight. Traders make their own decisions. CFDs and other instruments are only vehicles for implementing those trade ideas. No CFD trading system is complete without a wise and experienced trader at the controls. Even the best trading system will fail to make money in the hands of an amateur. That’s a proven fact!

Don’t Let Anyone Fool You into Believing that Profitable Trading is Easy

Online CFD trading only becomes profitable after making a serious commitment. Trading in general, doesn’t become easy before going through a long and painful learning curve. Only traders who have been through many hard times, are able to now trade easily. CFD trading however can enhance many retail trading strategies and concepts. From day trading to investing-like trading. And the longer one trades, the more apparent the benefits of CFDs become. Since every losing trade loses less money, and every winning trade makes more money, that they would otherwise. Investing in foreign currency markets through CFDs is also perfectly possible. As CFD trades can be held for indefinitely long. It is wiser to start trading on the longer time frames first, and then move onto the shorter ones. Because risk and stress management are hard to manage in fast moving markets. Day trading is a good choice for those who have already used CFDs in longer term trading, and know how to use them best. It is also wise to stick to one familiar market, and do day trading on that.

Online CFD Trading Using Level 2

Using level 2 data is a very interesting way to explore day trading. And it is also useful for assessing signals on the daily chart also. Level 2 data is for stocks only, but stocks can be highly correlated to some currency or commodity. Therefore don’t make the naive assumption that level 2 stock quotes are only useful for trading stocks. You can use level 2 quotes for monitoring market makers actions on few key gold stocks, and then trade CFDs on gold itself. Gold is a commodity, and commodity specialists will know more about it than anybody else. But the same specialists also trade gold stocks. So it is possible for example to assess a breakout day in gold through gold stocks and their level 2 data. One can see if there are enough buyers in the market, and if their orders are filled.

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Gaining Market Leverage with Online CFD Trading

Online CFD Trading Magic

There is a good reason why most retail size, battle-hardened traders use CFDs. They are wise enough to have know the benefits of CFDs and how to use them best.

Online CFD Trading Took Stock Dealing out of the Stone Age!

Online CFD trading really has taken stock dealing out of the stone age, and into the future. Because prior to CFDs, the financial industry was made only for large investors and banks. It was simply too costly, from every perspective, for retail traders to deal in stocks. First, it was the high commissions with every trade. Then, there were the restrictions imposed by the exchange from time to time. Even though it was still possible to predict a stock price trend and profit from it, you couldn’t possibly do it in a small account. Even good traders needed at least $50,000 to even think about stock trading. Leverage was available through the provision of margin trading accounts. But it was too small by today’s highly leveraged derivative trading instruments.

Online CFD Trading is Traders Favorite Way of Dealing

Online CFD trading today is all wise traders’ favorite way of dealing in the financial markets. Because of the very powerful and unique to CFDs benefits. These are the benefits of linear pricing, and enhanced liquidity. High leverage is no big deal these days, because all instruments offer it. Be it futures, spread betting or options, all offer high leverage. But these instruments have inherently bad linear pricing. And as a result the market trades from A to B, but the trader only captures a portion of the move. Only CFDs can tackle the problem of achieving linear, maximum exposure to the market. So that the move from A to B is fully captured. As new traders learn trading and hedging methods, they realize how valuable pricing linearity is for hedging risk, in fast moving markets. In this case, CFDs make it possible to implement amazingly efficient trading strategies. Ones where overall reward is greater than overall risk. New traders are less experienced but they do bring such new ideas to the trading community. And they do make trading much more interesting.

The Edge of CFDs in Numbers

The level of enhancement that CFDs can bring in trading is phenomenal. Of course it first takes a winning strategy, to make it all happen. CFDs are not the key to going in turning one’s trading around, from losing into winning. But a poorly winning strategy can be dramatically enhanced through CFDs. For example, a poorly, primitive profitable strategy for trading stocks and commodities may only yield 10% per month, and require few big losing trades. With CFDs, the losing trades can be better controlled and made to result in much lower losses. The overall profitability of such a strategy can be doubled by dealing with these few losing trades, in a better way. That’s why hedging strategies were invented. And these cannot be efficiently implemented without CFDs. CFD trading risks are always there, because of the market’s inherent risks. But they are smaller to the risks imposed by futures, options, or spread betting. Because CFDs enable the trader to get the best filling price, on each and every trade, winning or losing. That’s what online CFD trading offers today.

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