CFD Retail Trading Revolution. CFD trading enables retail traders to trade many markets, at good leverage and much better liquidity than any other method. This is because CFDs have their own liquidity pool, traders are offered all the benefits of the real markets, while many bad factors are prevented.
So, for example, CFD stock traders can go short on a stock, even when there is a ban on short selling at that stock exchange. Superior liquidity means that you can get a better price every time you open or close a trade, thereby increasing profitability and minimizing losses. Moreover, CFDs offer guaranteed stop loss orders and smooth trading, even slippage can be avoided in CFD forex trading if one uses Limit type orders to open trades.
CFDs are linear in their pricing, so if the market moves by $5, your open CFD trade will change in value by $5, times the leverage. This linearity is important in many hedging strategies and accurate trading, where accuracy is essential.
Commodity traders and stock investors also prefer CFD trading or have CFD trading in their strategies, because it allows them to make more small frequent trades at lower cost and superior speed. All hedging strategies require a CFD trade component to work efficiently.
Commodity traders such as grain and sugar traders were the first to figure this out, and are now using CFDs extensively to implement their complex trades. CFD trading is by far a method for advanced, overlooked strategies, that allow traders to do more with less money and less risk.
Making Millions in Commodities and Cryptomarkets
Cryptomarkets are the new hot commodities, the new goldmines, so both CFD brokers and wise traders will be all over them, and liquidity will grow exponentially in the coming years.
CFDs will enable small traders to trade these new markets, and even use cryptocurrency trades as part of their large commodity trades. Today, for example, a crude oil trader has to take into account the US dollar and its trend and trade the US dollar as well. If a cryptocurrency dominates in the dealing of crude oil in the future, all crude oil traders will be placing hedging trades on that cryptocurrency. And there’s no better way to do this than with CFDs.
Moreover, there are interesting relationships among certain markets, such as correlations and partial correlations. These can be traded with CFDs, and traders who will figure out these relationships and measure them accurately, will be able to make a lot of money, through the high leverage that CFDs provide, and through wise risk offsetting.
If you look at Bitcoin, for example, it’s bound to rise, reach some long-term steady state, and at that point, it will develop correlation patterns to some commodities. Commodities become undervalued and overvalued throughout the trading year, and similar patterns will appear on Bitcoin.
All these can be traded through CFDs, in a very cost-effective and fast way, and it will be possible for well-prepared small traders to make millions. This cannot be done on stock trading because stocks can crash, they can rise way too much, or the companies in question may go bust.
But commodities and cryptocurrencies are here to stay and have minimum and maximum price levels. CFDs will become more and more relevant to these trading methods, and brokers that offer high-quality CFD trading, as well as binary options brokers who offer good hedging possibilities.
In actual binary options broker search, Olymp Trade review information by real clients ranks this broker among the top 5 in the industry, these ratings take into account regulation, client service and trading platform innovation. More insightful articles on binary options, spot forex, the new Cryptomarkets and CFDs are available at the Investor Greg website.
