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What are CFDs?
CFD Basics
What are Contracts for Difference (CFDs)?
A Contract for Difference (CFD) is a derivative that lets you speculate on price movements of markets such as indices, commodities, stocks, crypto and forex without owning the underlying asset.
With CFDs you can go long (buy) if you expect prices to rise, or go short (sell) if you expect them to fall. Profit or loss equals the difference between entry and exit prices multiplied by your trade size.
Mechanics
What is CFD Trading and How Does it Work?
CFDs are traded on margin, meaning you put down a portion of the full value (the margin) to open a position, giving you leveraged exposure. Leverage can amplify gains and losses, so risk controls are essential.
On TradeFlix, you can participate directly or learn by following experienced strategy providers via copy trading while keeping control over allocation and stops.
How Does CFD Trading Work?
01
02
Go Long or Short
Buy if you expect the price to rise, or sell if you expect it to fall.
03
Set Size & Margin
Define contract size. Your required margin is a fraction of full exposure.
04
Manage Risk
Place stop loss/take profit, set per‑trade risk and overall drawdown limits.
05
Monitor Costs
Account for spread, any commissions and overnight financing where applicable.
06
Close & Review
Exit to realize P/L; review execution, risk and lessons to improve.
Benefits
Advantages of Trading CFDs
Benefit
Market Access
Trade multiple asset classes from one platform and account.
TradeFlix Advantage
Why Trade CFDs with TradeFlix
Pros
- Copy trading with clear allocation controls and stop‑copy rules.
- Transparent performance metrics to evaluate strategy providers.
- Modern UI, fast syncing, and tools to track positions and risk.
Considerations
- Leverage increases risk; inappropriate sizing can amplify drawdowns.
- Overnight financing can apply to held positions depending on market.
Common Questions
What are CFDs – FAQ
A CFD is a contract to exchange the difference between a market’s opening and closing price, allowing you to speculate on price without owning the underlying asset.
You deposit margin to open a leveraged position. Small price moves can have a larger impact on P/L, so define risk and use stops.
Yes. You can sell (short) if you expect price to fall, or buy (long) if you expect price to rise.
Typically the spread, any commissions on certain instruments, and overnight financing when positions are held after market close.
CFDs involve risk due to leverage. Start on a demo, learn core concepts, and consider copy trading on TradeFlix while using strict risk limits.