IQ Option. How to trade CFD?
It is a financial tool similar to indices and stocks. It let trading with corresponding asset even if you do not possess it.
You can get profit purchasing these contracts (if you are sure that its price will grow) or selling it (if you are sure in inverse market trend). Your profit will be defined as the distinction between purchase and sell price of these contracts.
Its price is an asset (stock, index or futures) price. If an asset's price grows, the instrument's price will grow too. An important distinctive feature is concluded in the absence of commission for exchange and other stocks trading drawbacks in the stock exchange. This instrument let using advantages of level of leverage that is usually unavailable when concluding equity transactions. Over the last few years this instrument gained in enormous popularity.
To trade with contract for difference, it is necessary to have margin and also level of leverage for capital increase.
The only one account opens an access to the market of indices, oil, gold, silver and, of course, big number of currency pairs.
There are various strategies used in trading with this instrument. They are a rather simple, so even beginning traders will realize it. The most useful is method of long or short position definition. Under the conditions of long position a trader buys an asset because he waits for its future price increase. A high level of prediction let traders get substantial gains even if an asset price's fluctuation is not big. Transactions may be effected on the basis of predictions both on a month, and on a year. Short position is applied when a trader predicts an asset price's fall and, correspondingly, decides to sell it. But in the following step a trader can purchase the same asset, but already in a much lower price.
If an asset course fall prediction does not hold true, its cost will start not falling, but growing, and a trader will incur losses on this position. Sum of the asset will be equal to the distinction between the asset's opening and closing price. The converse is also true: in case of true prediction, a trader will get profit.
Short position let getting profit during short (up to one minute) time periods.
Now it’s time to describe the trading process. It includes the following steps:
- Push on the “Plus” button to open a new asset and choose the kind of this instrument. Then make choice of the amount of your investment.
- Select the leverage level. Leverage may help to increase your first investment by certain percentage every time the price changes by 1%. But at the same time it can also increase your losses.
- In case you desire to open this tool's position waiting for the asset's price increase, choose the “Buy” button. In case you want to open the instrument's position wishing the asset price's fall, then push on the “Sell” button.
We wish you an enjoyable trading!