As CFDs are an over-the-counter derivative product it’s important to note that you don’t own the underlying share or instrument over which the CFD is quoted, this also means that you cannot transfer your position to a different CFD provider or stock broker, you can only deal with the CFD broker that you opened the position with.
One of the keys to success as a trader, and one that is so often overlooked by newbies or those looking for a quick way to make money is knowledge. Knowledge is an essential component of any services-based practice, whether you’re a solicitor, an accountant, an entrepreneur or a CFD trader. Knowing what you do inside out and back to front is something that will generally happen of its own volition over time as you immerse yourself in the markets, but there’s no advantage in leaving it to chance – becoming an expert in CFDs and the markets as quickly as possible is the quickest key towards succeeding as a CFD trader. The capacity to make a gain from small percentage moves on a share, forex pair or index is because of one important thing; the power of leverage. The leverage level offered by the CFD broker magnifies the underlying movement of the share, which can be both positive and negative.
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