Jump to content
AskTraders Trading Community
  • 0

Is CFD trading better than stock trading?


Jovan

Question

Hello, I have an interest in trading. However, I have not decided on the kind of trading I want to start. I'm in a kind of dilemma. I'm not sure between CFD and stock trading. I want to invest in trading, but I don't want to make a mistake. I want to take the route most worthwhile. Advise me accordingly.

Link to comment
Share on other sites

2 answers to this question

Recommended Posts

  • 0

Hi Jovan, both CFD trading and stock trading are excellent ways to make money from the markets. The main difference between the two types of trading is that CFD trading is not done on a centralised exchange like stock trading. Therefore, you can trade CFDs 24 hours five days a week, unlike stock trading which is limited to just a few hours each day.

There are also limits to which stocks you can trade with most investors choosing to trade US stocks, which are the most liquid in the world. You might have difficulties trading US stocks if you live in developing countries as the US exchanges place strict limits on brokers that offer their equities.

However, do not be discouraged because you can trade US stocks as CFDs via Forex brokers, hence, why many non-US traders prefer to trade CFDs. I would recommend starting with CFDs if you're based outside the US as they are readily available in most countries via Forex broker. Please do your own due diligence before making any investment decisions.

Link to comment
Share on other sites

  • 0

Hello Jovan,
A contract for Differences is absolutely a great way of trading stocks. Its almost similar to share trading only that here, far from share trading, you do not have an underlying asset.
 Whether you want to buy or sell, in CFD, you buy a contract, and therefore you will have a price for entering and an equal price while leaving the market.
Stocks may seem like an ideal option, especially for starters, since they are easy to use and understand, and they also give you self-satisfaction as you will be in control of a substantial part of the company.
However, CFDs in recent years have gained popularity due to a tone of benefits compared to stocks. In CFDs, you can get entrance to a wide variety of markets. You can trade CFDs on a wide selection of products; therefore, you are not limited like while trading stocks.
The moment you leave the market, your profit or loss is determined immediately, unlike stocks. Another key advantage is that you can trade CFDs on leverage, therefore, enabling you to grow your buying power.
For you to make a profit while stock trading, then the market needs to be rising. Markets can, however, not be rising at all times. Still, in CFD trading, you can gamble on when the prices are rising or falling and therefore be able to know when it is right for you to go short or long.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. To reply to this question, sign in or create a new account.

Guest
Reply to this question

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...