How to Stay Ahead of the Game with CFD Trading

Online CFD trading is taken very seriously today, as more and more wise traders look to improve their risk-reward figures through the hidden benefits of CFDs.

Online CFD Trading Does it Better

Online CFD trading offers much better trading conditions than any other method of trading. And this is because of liquidity and even the very ability to trade, which is sometimes lost in the classic trading instruments. Online CFD training shows new traders the tricks of the trade. And that the real benefits of CFDs are liquidity and linear pricing. Because that’s what profitable trading really boils down to. CFD trading educators are trading veterans coming from all kinds of markets and instruments. They settled with CFDs because they were quick to spot the real benefits of CFDs.

Online CFD Trading is Ideal for Small Retail Traders

Online CFD trading allows you to trade the markets effectively, at unmatched liquidity, and without giving away your strategy for anyone to see. This is not the case with large, multi millionaire traders, who have to trade futures or options. Their trades, bad and good, can be revealed through their exposure to the market. And not only that, but also Futures and options are not linear instruments, and tend to move in all kinds of ways, resulting in poor profitability on the good trades. Options in particular are highly inefficient. Very often, you will find that the underlying stock or currency has to move too much, just for your trade to break even. In many cases, as much as 50% of the market move is required just for the option trade to reach the break-even point. CFD traders do not have this problem, they can catch the entire move, 100%, and profit from it every cent of the way. Wise CFD stock traders however pay attention to option pricing. And they have found that Options can be used as indicators on stocks that are about to move to the upside. Some good CFD trading courses teach their students how to use options as indicators on their stock trades, and how to even time their CFD trades for exiting at the highest high. The principle behind this strategy is that stocks which are about to move to the upside, will have increased premiums on their out of the money call options. Just by comparing options of similarly priced stocks, the wise CFD trader can figure out what the market’s suspicions are. A stock that is about to break out will have an evidently higher premium on its out of the money call option. All the wise CFD trader has to do is go long that stock from their CFD trading account. And they will stand to catch every cent of the stock price movement, resulting in 100% more profit than the average option trade.

And There is More…

Online CFD trading can also be used in advanced hedging strategies. Many veteran traders use CFDs today, both in the intended part of the trade, as well as in the hedging part of the trade. Despite their deceptively simply linear pricing, there are two more parameters the trader can set on CFDs. These are the trade size and market level. Just by adjusting these accordingly, trading risk can be made asymmetrically smaller in relation to reward. And if you still wonder how does CFD trading work? And how can it offer so much more than classic instruments, you only need to recall that CFDs were made for the small size retail trader. And they do the best to serve their interests. And small size is not by any means small, since CFDs offer their unique liquidity for trading up to $100 per pip / market point. And that’s a big limit by a retail trader’s perspective. CFDs bring you the best of the financial markets, while filtering out much of the biggest negatives.