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Global markets present many opportunities for online investors, and nowadays anyone can invest in shares, commodities, indices, currencies, cryptos and ETFs in the form of CFDs. Taking your first steps as a trader might be a bit challenging, but remember that every successful investor was once a novice, and that with the free education resources and 1-on-1 training at EUFX Trade, you too can learn how to trade CFDs online. Probably sooner than you imagine.
Online Trading
New to the world of online trading and the numerous opportunities it presents? Welcome aboard! You might think that investing in shares, commodities, currencies and indices in the form of CFDs requires a degree in economics, but the truth is that the basics of online trading do not require a degree. There are millions of people all over the world who invest in CFDs online and take part in trading the world’s largest financial markets. Are you ready to learn how? Let’s take a closer look at this remarkable industry
Quite simply, forex trading is the act of buying and selling currencies. This is the world’s largest financial market with a daily turnover of $5 trillion and it involves many people – and many currencies. Because you are always buying one currency using another currency, you trade ‘currency pairs’.
Leveraged trading
One of the key elements of trading shares, commodities, indices, currencies, cryptos and ETFs in the form of CFDs, is an ingenious trading tool called ‘leverage’. It enables you to open large deals with a relatively small investment. How large? Up to 400 times your initial investment. For example, with a $200 investment, you can open a deal of up to $80,000. Please remember that while leverage allows you to maximize your trading power, it needs to be used carefully, because it also increases risk to your investment.
The maximum leverage on oil is 200:1. So, with a $200 investment, you can open a deal of up to $40,000. Let’s look at the math:$200 × 200 = $40,000
Short and Long positions
At eufxtrade you can take advantage of any change in the price of a specific instrument – even if it’s falling. When you think the price of an instrument will fall, open a ‘Sell’ deal. This is called ‘short trading’ or simply ‘going short’. When you think the price of an instrument will rise, open a ‘Buy’ deal. This is called ‘long trading’ or ‘going long’.
Investors use long and short positions to achieve various results. An investor may establish long and short positions simultaneously to leverage or produce income from a transaction. They can also use both positions to hedge against possible portfolio losses.
Important
A simple long stock position reflects a bullish outlook. The buyer anticipates that the stock will rise in price. A short stock position is bearish. The seller believes the price will decline.
What is volatility
Volatility refers to the degree of variation or fluctuation in the price or value of a financial asset, market, or investment over time. In the context of finance and economics, volatility is a measure of how much the price of an asset, such as stocks, bonds, or commodities, changes within a certain period.
There are two key aspects of volatility:
High Volatility: When an asset or market has high volatility, its price can change rapidly and unpredictably in short periods. This can present higher risks, but also potential for higher returns.
Low Volatility: When an asset or market has low volatility, its price remains relatively stable, with smaller and less frequent fluctuations. This generally presents lower risks but also lower returns.
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