CFD Trading and CFD Brokers

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Virtual Trading Using CFDs

• Contract for Difference or simply CFD trading is
  a kind of virtual replacement of physical
  trading. In physical trading first we select a
  market on which we wish to trade. Next we
  purchase the product. And finally we sell them.

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• The difference of sell price and cost price,
  multiplied with the product volume, gives us the
  profit or loss depending on the trading success.
  The virtual counterpart of this trading is the
  CFD trading.

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• In Contract for Difference trading us first find
  a market, from the list of available market
  domains. Then we open a stock with an opening
  price. Finally at a point of time we close the
  stock with some closing value. The difference
  multiplied by the volume of underlying market or
  product gives us the profit.

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• When you wish to start CFD trading, you first
  need to deposit marginal money. This is known as
  margin value. It is calculated as a minimum
  percentage of the total value of the opening
  stock. The total value is calculated by
  multiplying your market volume with value of each
  opening stock.

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• The minimum margin requirement is 3 of the
  opening stock value. The minimum stopping point
  is placed at 80 distance of this margin value.
  Again every market will have a Maximum Computer
  Generated Stop Level. The maximum allowance that
  your system will give you to place your stop
  loss, will be having a 80 distance with this
  value.

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• If you are personally not setting your stop loss
  when opening the account the software system will
  do that for you. By default it places the stop
  loss at 80 difference from CGSL or the total
  value of your fund, whichever is lower.

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• This can be altered by you only after opening
  your position. You can set a trailing feature
  with it too. It helps you to anchor your stop
  loss with the price ups and downs and finally
  puts it in a profitable point for you.
• Contract for Difference trades are always
  profitable, provided you know how it works. So,
  take time to know it and then have some real good
  trading.
• For more information on trade CFDs, visit
  http//www.tradecfds.net

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