Many professional traders know how to trade through many different markets, using a range of methods. One such tool, which seems to be becoming more popular recently, is CFDs, or Contracts For Difference.
For the uninitiated, basically you are entering a contract in which you only pay a small margin to be able to control a large amount of shares. CFDs are popular because you don’t need a huge amount of capital to make real money out of them. The problem with that though is you can lose lots of money as well, even if you didn’t have a huge amount of capital to start with.
This means that it becomes so much more important to have knowledge and experience with CFDs before jumping into the market.
Unfortunately, other than ordinary shares and scarce information available on the internet, there isn’t a huge amount of resources available to help with this. Luckily, the ASX has come up with a solution for us. Similar to the share trading game we run that uses a hypothetical $20,000 to purchase shares with; this CFD simulator gives you a hypothetical $100,000 to play with.
If you are considering trading in CFDs in the near future I strongly suggest checking this out. You could be amazed at how quickly you can boost your balance, and also how quickly you can reduce it! This simulator uses a margin of 5% so considering the $100,000 you start with, that gives you enormous purchasing power. So, good luck and happy trading.