MyFxBots
Published on Thu Jun 9th, 2022

Top 5 Astonishing CFDs Verities

A contract for difference (CFD) allows you to trade a stock, index, crypto, or commodity without owning it. When you trade a CFD, you simply make (or lose) the difference between the price you bought it at and the price you sell it at.

Why have CFDs quickly become one of the preferred ways for investors in the financial markets to trade?

Because they:

  • Are easy to access with limited starting capital
  • Have built-in leverage (you can take trades greater than the value of your account size, making them perfect for short-term trading)
  • Are available for a variety of global markets

CFDs can be used as outside-the-box solutions for several common trading problems for savvy traders. They can also be used to implement more advanced strategies.

Top 5 Astonishing CFDs Verities

  1. Trading smaller

    One of the less appreciated benefits of using CFDs is that they allow you to trade at a smaller size.

    Why is this so helpful?

    On top of the ability to trade on a smaller account in general, it also allows you to be much more accurate in your position sizing. This benefits you no matter what size you are trading.

    For example, if you trade the S&P500 e-mini futures contract, the contract trades in $50 increments. In contrast, the CFD trades in $1 increments. The smaller contract size provides you with much more risk control than its larger cousin.

  2. Scaling out of your trades

    The smaller position size also has the great benefit of allowing you to scale out of your positions. The small minimum position size allows you to split your trade into several positions. Optimally, you would split the trade into three positions rather than one and close them at separate points.

    This method allows you to take some profit when the market makes it available. You can make some profit the moment you can, take more at your target, and leave some skin in the game for a big win.

  3. Hedging your stock portfolio and earning interest

    Think the market is going to head down, but do not want to sell your stocks? Going “short” on a CFD index might be just the thing for you.

    By shorting a CFD, you benefit as the price of the index goes down. Of course, you lose when the index goes up. The profits in the CFD can thus offset some or all of the associated losses in your stock holdings.

  4. Trading in the evening

    CFDs provide access to global markets that trade 24 hours a day, except on weekends. The beauty of this is that you can fit your trading into your schedule. Have a day job? No sweat. You can choose a market that is active during your evening.

    For example, if you are Australian-based, you could look to trade the UK market index (FTSE100), which is active after you finish work for the day.

    Making sure your trading fits nicely into your schedule is very important. If you do not balance your lifestyle with your trading, you will find it difficult to trade consistently.

  5. Tax benefits

    Depending on your location, CFDs can be tax efficient. If you lose when trading with CFDs, they are generally tax-deductible. This means you can offset your losses against your income to reduce your tax obligation. You can even receive a refund under certain circumstances.

    Of course, you do not want to trade to lose in order to gain the tax benefits. However, even the best traders do not win all the time. Saving some money in taxes when things are not going so well is a nice little perk.

Trade CFDs with Tickmill Markets today

 Trading is risky. T&Cs apply.

Latest Tickmill News and Updates

Deposit, Trade, & Win in Masters of Crypto Trading Challenge! The top 8 Clients with the highest volume (in Notional $), will win Cash Prizes worth a total value of US$ 30,000. 2 traders will be selected randomly through a Lucky Draw. 
Tickmill Wins Ultimate Fintech Award 2022 - Best Forex Spreads Tickmill was recently awarded an Ultimate Fintech Award 2022 for ‘Best Forex Spreads’ following this year’s iFXEXPO which was held between the 7th and the 9th of June 2022 in Limassol, Cyprus.
Top 5 Astonishing CFDs Verities A contract for difference (CFD) allows you to trade a stock, index, crypto, or commodity without owning it. When you trade a CFD, you simply make (or lose) the difference between the price you bought it at and the price you sell it at.
Up to $2,000 Ramadan Raffle 1443/2022 Every Friday Tickmill will be running their Ramadan Raffle where you’ll be in with a chance of winning up to $2,000! The Contest is only available for clients of Tickmill Ltd | T&Cs apply.
New Year, New You, New Cryptos! Tickmill are excited to announce that they've launched a whole new range of cryptocurrency CFDs for their clients. Now you’re able to trade Bitcoin, Ethereum, Litecoin, Cardano, Ripple, Stellar, Chainlink, and EOS on the MT4/MT5!
Oil report: WTI breaks to multiyear high but is it done yet? this Oil report will be dedicated to explaining the most important drivers of Oil prices at the moment and their potentiality for future price movement.
What’s in Store for 2022 - LIVE Panel with the Tickmill Experts! to prepare for what is expected to be an eventful upcoming year, join this star-studded panel to learn from the pros. Get insight into the possible developments of the financial markets for the upcoming year and plan your trading strategy with the experts at Tickmill.
Trade GOLD and SILVER on Metatrader Platform Precious metals like Gold and Silver are tradable instruments classed as a commodity, therefore making their price relatively uniform across the world. Traders tend to use precious metals as ‘safe-haven’ assets which become more tradable as economic developments and political unrest caused increased volatility across other markets.
5 Hottest Market Trends and Hypes of 2021 We can all agree that it’s been quite a year for the markets! As the world evolves, so do the influencers of financial markets, as is evident from some of the hypes and trends we witnessed throughout the year
Tickmill Social Trading Revolution Pelican is an innovative all-in-one mobile auto-copying application that allows you to follow and copy trades from other successful traders. Tickmill allows its traders to do it via its official platform.
Tickmill Launches the MT4/MT5 Market Sentiment Trading Tool! Tickmill’s Acuity Trading Tool gives their traders a real edge over the markets by enabling them to identify trading opportunities as they arise.
Tickmill MyFxBook Copy Trading Copy Trading simply is copying the trades of other successful traders within another investor's MT4 account. That investor - that could be you - can look at the performance of various trading systems that have been created and being traded by other successful traders, given the choice between a diverse range of trader systems, and can choose one of them to follow based on his preferred trading style.
Forex Trading Demystified, Ultimate Forex Trading Workshop Discover the world of online trading and its key strategies in Tickmill's new webinar series together with Tickmill's trading specialist, Rosalie Sta. Ana.
Tickmill Launches New ‘Get Paid to Trade’ Rebate Scheme! The reward scheme is based upon the trader's monthly trading volume, whereby the larger the volume he trades, the more he is eligible to earn
Short Term Memory, Let Go! When emotions have taken a role, it could prevent them from deciding rationally the way that could make them profitable in the past. It's so important to find a way to stop emotions from affecting our trading adversely and cease short term memory. Some helping tips
Set the Correct Winter GMT Offset in your EA for US Daylight Saving Time Every Forex broker company has its own GMT offset, while many Forex robots are GMT dependent, they need to get GMT offset to be set correctly to trade properly and show good results
Building a Naked Trading Strategy Recorded Webinar by Tickmill Tickmill, the well known Forex broker has multiple tools to improve analysis accuracy, they call them the NAKED Trading Tools that they prove in their live trading session which was published in this recorded webinar!
Bollinger Strategies in Forex Recorded Webinar By Tickmill This webinar was held by Tickmill broker during which the introducer explains a simple, yet effective Bollinger band based Forex strategy to use in the Forex markets.
Scalping Strategies in Forex Recorded Webinar By Tickmill This webinar was held by Tickmill broker during which the introducer explains a simple, yet effective scalping strategy to use in the Forex markets

Talk about Tickmill

Information, charts or examples contained in this review article are for illustration and educational purposes only. It should not be considered as an advice or endorsement to purchase or sell any security or financial instrument. We do not and cannot give any kind of financial advice. No employee or persons associated with us are registered or authorized to give financial advice. We do not trade on anyone's behalf, and we do not recommend any broker. On certain occasions, we have a material link to the product or service mentioned in the article. This may be in the form of compensation or remuneration.