Introduction

If you have never traded a CFD in your lifetime, it can be very easy for you to get confused in the process. That is why before you start trading in singapore, you must first try to understand what CFDs are and how they work. There are many things that all traders should know and understand before they begin their trade. Here is what they should know

What CFDs are

CFDs are also known as a contract for difference. These are just instruments that help to monitor or to mirror the direction and the movement of specific products even when you do not own the asset. These can be a share, commodity, index, and currency as well. CFD is just like two parties having a contract.

Buying long and selling short

CFD is all about price prediction. If you believe that a price of a certain commodity will increase, you will be buying long and the profit from every price movement will increase. Buying short is the vice versa of buying long. When you predict that the price will decrease, you will be selling short. It needs you to keep a strict watch on the market movements, only then you will be able to make the predictions.