Entering the trading world is only interesting these days, as the choices available are plenty! Also, when few of these choices are highly flexible, such as like the Forex and the CFD, who wouldn’t want to add more money to their wallet? If you too are interested in doing so, start your significant trading journey by understanding the similarities and the differences that remain between these two major trading markets of the world!
The Forex market is the largest liquid market in the world, where the currencies of the world are traded against each other! Although the currency choices are plenty, remember, your trading asset could only be the currency all the time!
In a CFD market, your speculation of the specific trading asset determines your profitability! That is, you have to speculate the price movement of the underlying asset, which when happens as predicted yields you the profit. In here, along with the currency, you are also allowed to trade the stocks, commodities and therefore, the choices are plenty!
The Forex is a leveraged product, which means you have the access to the margin to open a specific trading position! The margin used in forex is generally, expressed in ratio! That is, a leverage ratio of 1:10 means, for every $1 money in your account, you are allowed to participate in a trading position that is worth $10, appreciably!
CFD is also a leveraged product like the Forex but, here the margin if fixed and usually, represented in percentage! That is, a margin of 10% means, the trader only has to invest 10% of the market’s worth and borrow the remaining from the broker!
The Forex market is a flexible market, as it is available 24/6 thus, allowing the traders to trade whenever they prefer! Also, with the availability of sophisticated Forex robots like the QProfit System, your accessibility only increases, as the automated robot is capable of executing the trades without waiting for your availability any day! To understand better about it, this review might help greatly!
Unfortunately, the CFD market is not as flexible like the Forex, as the accessibility of the market, also depends upon the underlying asset involved!
The behavior of the Forex market is also affected by the fundamental factors like respective government policies, key economic indicators and so on!
Only the supply and demand of the specific asset determines the price movement or the market behavior of the CFD!