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CFD Trading and CFD Brokers

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					                                      Virtual Trading Using CFDs

Contract for Difference or simply CFD trading is a kind of virtual replacement of physical trading. In
physical trading first we select a market on which we wish to trade. Next we purchase the product.
And finally we sell them.

                                              The difference of sell price and cost price, multiplied
                                              with the product volume, gives us the profit or loss
                                              depending on the trading success. The virtual
                                              counterpart of this trading is the CFD trading.

                                              In Contract for Difference trading us first find a market,
                                              from the list of available market domains. Then we open
                                              a stock with an opening price. Finally at a point of time
                                              we close the stock with some closing value. The
                                              difference multiplied by the volume of underlying
                                              market or product gives us the profit.

When you wish to start CFD trading, you first need to deposit marginal money. This is known as
margin value. It is calculated as a minimum percentage of the total value of the opening stock. The
total value is calculated by multiplying your market volume with value of each opening stock.

The minimum margin requirement is 3% of the opening stock value. The minimum stopping point is
placed at 80% distance of this margin value. Again every market will have a Maximum Computer
Generated Stop Level. The maximum allowance that your system will give you to place your stop
loss, will be having a 80% distance with this value.

If you are personally not setting your stop loss
when opening the account the software system
will do that for you. By default it places the stop
loss at 80% difference from CGSL or the total
value of your fund, whichever is lower.

This can be altered by you only after opening
your position. You can set a trailing feature with
it too. It helps you to anchor your stop loss with
the price ups and downs and finally puts it in a
profitable point for you.

Contract for Difference trades are always profitable, provided you know how it works. So, take time
to know it and then have some real good trading.

For more information on trade CFDs, visit: http://www.tradecfds.net

				
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posted:10/9/2012
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Description: Learn more information about CFD trading and CFD brokers.