If you have been considering getting into the trading industry, you may be wondering which form of trading is best for you. The stock market is the most obvious gateway into trading, however, CFD trading could be a wiser choice whether you’re experienced or non-experienced.
CFD trading, otherwise known as contract for difference trading is the act of tracking the value of an asset to make the correct decisions to win a profit. Unlike the stock market, CFDs utilise a more sophisticated trading approach such as short-selling, as opposed to buying shares and investing.
Here are some of the key benefits of CFD trading that you may not have been aware of:
A 24-hour basis
Unlike the stock market which opens in the morning, you can trade CFDs on a 24-hour basis, except for weekends. This is beneficial to those who work full-time positions or other responsibilities, meaning they can’t sit at their computer all day but are looking to make the most of their savings to earn a profit in their spare time.
Short-selling
Unlike stocks which are long-term investments – and all you hope for is that the value of the share rises to make a profit. However, markets often become over-inflated and individual stocks can drop dramatically which can be worrying. All you can do is hope that the stock rises again as you cannot always pull out of the investment made.
CFD trading, on the other hand, allows you to profit from short-selling. However, it would always be worth finding out more about long term trading strategies with CFDs. You can speculate the price of the asset reducing so you know exactly what to expect. If the price of the asset does reduce (which occurs more regularly than if it were to rise), you will make a profit.
A wider range of assets
CFDs allow you to trade on a wider range of assets as opposed to stocks, so you can choose the most suitable option for you. The benefit is that you won’t be stuck in markets you have no faith in or are performing poorly.
Immediate cash settlement
If you’d prefer to get your hands on the cash profit immediately, CFDs would be a much better option for you. Unlike stocks, CFDs have no settlement phase. As a result, it is extremely easy to enter and exit trades and quickly look into your next trading opportunity. Stocks on the other hand can be an extremely slow process in between trades – you could be waiting up to 48 hours for the trade to settle and gain access to the cash you have made.
Anyone can invest
The good news is that absolutely anyone can get into the CFD trading industry, regardless of your experience or background. You can be working a full-time job, be self-employed or unemployed and you’ll get the same advantages. You’re free to sit in the comfort of your own home, choose your trades and walk away with mega-profits.