CFD Trading Tutorial -Contract for Difference Trading Guide

TRADING THE FINANCIAL MARKETSTRADING THE FINANCIAL MARKETS

BEGINNERS & BEGINNERS & SEMI-ADVANCED CFD TRADERSSEMI-ADVANCED CFD TRADERS

“The CFD Trading Tutorial by CFDAgent.com” “The CFD Trading Tutorial by CFDAgent.com”

The CFD Trading Tutorial The CFD Trading Tutorial -Copyright © September 2016 -Copyright © September 2016

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THE CFD TRADINGTUTORIAL

TRADING THE FINANCIAL MARKETSTRADING THE FINANCIAL MARKETS

The CFD Trading Tutorial by CFDagent.com

THE CFD TRADING TUTORIALTHE CFD TRADING TUTORIAL

FOR BEGINNERS &FOR BEGINNERS &SEMI-ADVANCED CFD TRADERSSEMI-ADVANCED CFD TRADERS

--TABLE OF TABLE OF CONTENTSCONTENTS--

1. Introduction to CFD Trading1. Introduction to CFD Trading........................................................................................................

2. CFDs on Futures2. CFDs on Futures......................................................................................................................................................................

3. The Cost When Trading CFDs3. The Cost When Trading CFDs..................................................................................................

4. The Need for Reliable CFD Brokers4. The Need for Reliable CFD Brokers......................................................................

5. The Available Financial Assets5. The Available Financial Assets................................................................................................

6. Important Tips When Trading CFDs6. Important Tips When Trading CFDs..................................................................

7. 7. CFD Trading OrdersCFD Trading Orders......................................................................................................................................................

8. CFD Trading Rebates8. CFD Trading Rebates..............................................................................................................................................


1. Introduction to CFD Trading

What is a CFD Contract?

CFD means Contract for Difference and it is a derivative product that can trade any

financial instrument (Currencies, Equities, Precious Metals, Industrial Metals, Energies, Soft

Commodities) without the need to own it.

Basic CFD Trading Features

CFD trading offers enormous flexibility by covering the needs of all trading styles (scalping,

day-trading, swing-trading, and long-trading).

Availability of Hundreds of Regulated CFD Brokers

Different Account Types and Lot sizes (micro, mini, and standard)

Wide Selection of Financial Instruments (thousands of different markets are

available)

Low-Cost Trading (as low as 1.3 pip on EURUSD, commissions included)

High Capital Leverage (we recommend no more than 50:1)

Wide Selection of Trading Platforms (WebTrader, MetaTrader, NinjaTrader,

TradeStation, and other trading platforms)

Mobile Trading Capabilities

Social Trading Capabilities

Automated Trading, API Trading, PAMM Accounts, and Expert Advisors


Mirroring Global Markets

CFD trading offers investors the opportunity to speculate on any financial instrument by

mirroring its price movement. You can trade the price swings of any financial instrument

without the need of actually own it.

When a new CFD position is opened, the profit/loss of the CFD contract is determined by

the difference between the opening and the closing price of the underlying financial asset.

The final profit/loss of any CFD trade is calculated simply by the difference between the

buy and the sell price of the CFD contract.

A CFD position can be closed either:

(i) If the price of the underlying financial instrument touches the take-profit price of the

trade position (PROFIT)

(ii) If the price of the underlying financial instrument touches the stop-loss price of the

trade position (LOSS)

(iii) The trade can close also manually by the trader anytime he wants to (PROFIT/LOSS)

Example of a CFD Trade on EURUSD (Calculating the Profit/Loss)

Let's assume that a Forex trader buys 1 lot of EURUSD at 1.1002 and sells it at 1.1022

-Initially, EURUSD is bought and sold at 1.1000 / 1.1002 (bid/ask)

-In order to buy 1 standard lot (100,000 USD of value), the trader needs to have about

$500 in his account (that means leverage 200:1)

-As the position is opened the trader notices that his account is charged with about $20.

This is due to the difference between ask and bid (in our example 1.1000 / 1.1002, which

means 2 pips spread)

-As EURUSD moves 20 pips higher, the trader decides to close his position


-The new Ask/Bid is 1.1022 / 1.1024

-The trader closes his position at 1.1022

-The profit is calculated as 1.1022 – 1.1002 = 20 pips

-20 pips of profit equal about $200

Note: This is just an example, we recommend capital leverage no more than 50:1

CFD Trading Advantages

CFD trading has become highly popular nowadays, among world investors. These are the

main reasons:

(1) 24/5 trading via desktop or mobile devices

(2) Trading rising or falling markets, choosing among a wide variety of trading orders

(3) Choosing among thousands of different financial products to trade (Forex, Equities,

Commodities, etc.)

(4) Choosing among hundreds of different CFD brokers, and taking advantage of special

promotions for new clients (deposit bonus, no deposit bonus, trading rebates, etc.)

(5) Trading CFDs via the simplicity of a WebTrader platform or via the advanced

technology of the MetaTrader series of platforms

(6) Using state-of-the art trading technology (Automated Trading, Social Trading, API

Trading, PAMM Accounts, Expert Advisors)

Trading on M argin

When an investor decides to buys shares, he has to pay the full value of these shares. In

the best case, and if his stockbroker allows it, he he can pay 50% of the value of the

shares (2:1 capital leverage).


On the other hand, CFD traders don't have to pay 50% of the value of the assets they

buy. CFD brokers usually offer leverage 50:1, or even more. That means in order to trade

$100,000 worth of shares, you need to have 2% of the value of the position in your

trading account.

In other words, you can trade $100,000 with just $2,000 in your trading account. But that

is an advantage only if you are not greed. If you tend to leverage all your trades up to

50:1, or more, there is a 90% probability that you will lose your capital.

In the following chart you can see the relation between the use of high capital leverage

and the possibility of losing your capital.

Chart: As the Trading Leverage Increases Arithmetically, the Trading Risk and the Trading

Cost Increase Geometrically

The chart shows that as the capital leverage increases arithmetically the possibility of

losing your entire capital increases geometrically. If you trade intraday, and you use 500:1


trading leverage, there is almost 100% possibility that you will lose all your capital in a

short-period. Don't be surprised, this is based on pure maths.

Professional traders avoid to leverage their trades more than 20:1, and they don't dedicate

more than 2.0% of their entire capital in a single trade position.

“Don't try to outsmart the professional traders, they always know better”

The Capital Leverage Formula

The following formula can help traders to optimize the use of capital leverage. The capital

leverage formula aims to provide a simple framework for understanding the attractiveness

of each individual trade, and therefore, choosing the ideal leverage ratio.

Here is the Capital Leverage Formula (Concept: G.P. )

Leverage Formula= [ (P/L) * (1/Spread) *◘ (R/2) ] %

Where:


(P/L) = Profit to Loss Ratio (Take-Profit to Stop-Loss, in pips)

(Spread) = The difference between Ask and Bid Price (First Seller and First Buyer)

(R) = Risk Tolerance (values 1-100, equals the overall risk acceptance as a

percentage %)

Start Trading Risk-Free

The best way to start trading CFDs is by using a free Practice Account. Test your skills on a

Practice Account and then move to a Real Account.

Three (3) Risk-Free Ways to Start trading CFDs:

Free Practice Account

Demo Account Contest

No-Deposit Bonus Account

If you start trading on a demo account contest you can sharpen your skills and at the

same time you can earn some cash.

On the other hand, a No-Deposit Bonus Account offers the chance of trading in real terms,

and if you are lucky, you can withdraw both your bonus and your profits.

Example of CFD Brokers offering No-Deposit Accounts:

» XM $30 No-Deposit Bonus

» IronFx $35 No-Deposit Bonus


http://clicks.pipaffiliates.com/afs/come.php?cid=63646&ctgid=17&atype=1&langcode=en&brandid=3

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2. CFDs on Futures

Instead of trading Cash CFDs you can trade CFDs on Futures, given that your CFD broker

offers that feature. The great advantage when trading CFDs on Futures is that you don't

pay overnight rates. That means you can trade gold or crude oil without having to pay any

overnight rollovers. In Chapter-3, you can find OUT what is an overnight rollover, or else a

SWAP rate.

These are the main characteristics of CFDs on Futures:

All charges are included in the spread

Futures CFDs are offered in wider spreads than cash CFDs (premium added)

No overnight charges (SWAPs)

Profit/Loss is realized either on exit (the same way as in common cash CFDs), or at

the expiry date

CFD Futures usually expire after 2-3 months

The Pricing between common CFDs and CFDs on Futures is almost identical

CFDs on Futures can be traded on Metatrader, as common CFD contracts

Usually CFD brokers offer the following markets as the underlying instruments of CFD on

Futures:

The Dow Jones Industrial Average (symbol: US30)

The Nasdaq (symbol: US100)

The S&P 500 (symbol: US500)

Euro Stoxx 50 (Symbol: EU50), the German Dax (symbol: GER30), and the FTSE

100 (Symbol: UK100)

Other major European stock indices


Major Asian stock indices

Crude Oil (symbol: OIL), and other Energies

Precious Metals (Gold, Silver, Platinum)

Industrial Metals (Copper, etc.)

Several Soft Commodities (Cocoa, Wheat, Sugar, etc.)

In the following chart, you can see the pricing of a cash CFD and a CFD on Futures on

Nasdaq (US100). The pricing is almost identical.

Chart: Identical pricing between common CFDs and CFDs on Futures


3. The Cost When Trading CFDs

These are all the fees and commissions, charged by CFD brokers, that you should know

about before start trading CFDs.

(i) Trading Spreads

→ CHECK SPREADS: at the CFD broker's website

All financial assets are offered with two prices (ask and bid). The spread is the difference

between ask and bid. Almost all CFD brokers charge spreads, and nothing else. The

minimum spread you will usually pay when trading CFDs is about 1.3 pip on EURUSD.

Prefer STP brokers, they offer by rule considerably tighter trading spreads than market■

makers

A clever way to reduce your trading cost is to join a Trading Rebate Plan (see Chapter-■

8). Learn more about rebates at www.Forex-Rebates.com

Be Aware of Re-Quotes

A re-quote means that when you open a trade position, the price you pay is worst than

the one you have entered. That means extra cost.

Re-quotes usually occur in fast-moving markets, such as markets after important news

announcements. You can protect your account from re-quotes by placing a pending order

(limit order) and not an instant execution order. When you place a limit order, you state

that you are willing to open a trade position at a specific price or better (Find more about

pending orders at Chapter-7).


http://www.Forex-Rebates.com/

(ii) Trading Commissions Charged

→ CHECK COMMISSIONS: at the CFD broker's website

CFD brokers don't usually charge trading commissions. But some CFD brokers may charge

very tight spreads by charging also trade commissions. These commissions are calculated

on a round lot basis.

(iii) SWAPs / Overnight Financing

→ CHECK SWAP CHARGES: at the CFD broker's website

The SWAP rates exist in order to balance the overnight cost of money as it is expressed by

overnight interest rates.

As CFDs are traded on margin, when you open a long or a short position it becomes the

subject of interest rate charges, as any other cash transaction. This is because money is

involved in order to finance the purchase. The SWAP rates can be debited or credited. The

difference on positive / negative swap charges depends on the asset you are trading, and

the direction you are trading.

Explanation of SWAP Rates

As currencies are traded in pairs, each time a transaction occurs, one currency is

purchased and one currency is sold.

There are Forex currencies offering high-interest rates (NZD, AUD, etc.) and other

currencies offering low-interest rates (USD, EUR, etc.). When you trade any Forex pair, the

difference in the interest rates of the two currencies may be positive or negative:

(I) if the difference is positive, then a swap amount is credited overnight,

(ii) if the difference is negative, then a swap amount is debited overnight.

Note, that if you trade commodities or equities, the SWAP rates will be always negative.


The SWAP cost applies at the end of each trading day at midnight (according to your CFD

broker's server time). The SWAP rate amount is tripled on Wednesdays, in order to cover

Saturday and Sunday. That means the SWAP rates are applied 365 days per year.

The SWAP rates can be either positive or negative, for example:

-If you trade long a Forex pair, such as AUDUSD or NZDUSD, the difference is positive

(positive SWAP rate) and it is credited in your trading account.

-If you trade long on USDZAR, or short on AUDUSD, the difference is negative (negative

SWAP rate) and it is removed from your trading account.

Avoid Paying SWAP Charges via CFDs on Futures

As it was briefly explained at Chapter-2, a smart way to avoid paying SWAP rates is by

buying CFDs on Futures.

For example, if you buy the USD30 Index via a CFD on Futures you will pay a greater

spread, but you will not pay any SWAP charge until the contract ends. Usually CFD on

Futures expire every 2-3 months, and mirror the price movement of any underlying

instrument exactly the same way as cash CFDs.

If you are a swing or a long-term trader, CFD on Futures is your best chance to make

money.

(iv) Funding (Withdrawal) Fees

CHECK THEM OUT: using the CFD broker's live chat service, or via email

Funding fees and commissions are usually charged only on withdrawals, but most CFD

brokers don't charge funding fees at all.

The funding fess, when they are charged, involve withdrawal fees of $10-20.


(v) Maintenance/ Inactive Fees

CHECK THEM OUT: via the CFD broker's live chat service, or via email

Some CFD brokers may charge fees for inactive accounts. These fees are called

Maintenance/ Inactive Fees.

Most CFD brokers don't charge maintenance fees.


4. The Need for Reliable CFD Brokerage

CFD trading requires opening a trading account with a CFD broker. CFD brokers usually

don't charge trade commissions, they charge only a spread between the ask and the bid

price.

Types of CFD Brokers

Just like when trading the Foreign Exchange Market, there are two classes of CFD

providers:

(1) DMA Brokers (Direct Market Access)

DMA providers (ECN/STP brokers) sent trader's orders directly to their order book. DMA

providers typically charge tighter spreads than market makers, but they may charge trade

commissions.

-In total, the trading cost when trading with a DMA broker is tighter than the trading cost

when trading with a market maker.

(2) Market M akers (or Agents or Dealing-Desk Brokers)

Market Makers offer a market within a market. They let their clients trade against each

other and they collect the spread between bid and ask. Market makers do no charge trade

commissions, but the spreads they offer are usually very wide. For example, the minimum

spread on EURUSD is 2.0 pips. Re-quotes and delays on order execution are common

phenomenons when trading with market makers.

It is better to trade with a regulated DMA broker than trading with a market maker.

Professional traders definitely avoid to trade with a Dealing-Desk.


Basic Characteristics of a Good CFD Broker:

(i) It is regulated by a reliable government body, and can guarantee real safety of trading

funds (segregated client bank accounts, etc.)

(ii) It offers tight transaction cost (narrow spreads, low commissions, no re-quotes)

(iii) It provides a wide asset index, and many different classes of financial instruments

(CFDs, CFDs on Futures, etc.)

(iv) It offers fast order execution with minimal delays

(v) It provides good variety of trading platforms (Allows trading CFDs via MT4)

(vi) It supports many different fund methods, and does not charge commissions on

withdrawals, or on inactive accounts

(vii) If offers fast customer service via email and live chart support

In the following table you may find some regulated CFD brokers, with manyyears in the market.


REGULATED CFD BROKERS LIST

This is a list of regulated CFD Brokers offering funds safety via segregated client bank accounts.

CFD BROKERSCFD BROKERSREGULREGULATIONATION

PLATFORPLATFORMSMS

WELCOMEWELCOME

BONUSBONUS

& TRADING& TRADING

REBATESREBATES

MINIMUMMINIMUMDEPOSIT &DEPOSIT &

FUNDFUNDMETHODSMETHODS

INFORMATIONINFORMATION

■ ■ XM XM

(TRADING (TRADING

POINT)POINT)

Type:Type:

STPSTP MODEL MODEL

CySEC CySEC

Cyprus, Cyprus,

RegisterRegister

ed also ed also

with FCAwith FCA

UK, UK,

BaFIN, BaFIN,

ASIC ASIC

(Australi(Australi

a)a)

Metatrader,Metatrader,

WebTraderWebTrader

plusplus

-Mobile -Mobile

PlatformsPlatforms

40% Credit ■ 40% Credit ■

Bonus up to Bonus up to

10,000USD10,000USD

Trading ■ Trading ■

Rebates via Rebates via

Forex-Forex-

Rebates.comRebates.com

MINIMUM MINIMUM

ACCOUNT: ACCOUNT: $10$10

Bank Wire■ Bank Wire■

Credit Cards■ Credit Cards■

MoneyBookers■ MoneyBookers■

Neteller■ Neteller■

Liberty Reserve■ Liberty Reserve■

More Methods■ More Methods■

► ► REVIEW CFD REVIEW CFD

BROKERBROKER

►► VISIT CFD BROKERVISIT CFD BROKER

■ ■ TALLINEXTALLINEX

Type:Type:

ECN / STPECN / STP

US US

TRADERS TRADERS

WELCOMEWELCOME

FSA in FSA in

St. St.

Vincent Vincent

and The and The

GrenadinGrenadin

eses

MetatraderMetatrader

plusplus

Mobile Mobile

PlatformsPlatforms

-PAMM -PAMM

AccountsAccounts


BonusBonus



Forex-Forex-


MINIMUM MINIMUM




■ ■ NetellerNeteller


BROKERBROKER


■ ■ HOTFOREXHOTFOREX

Type:Type:

ECN / STPECN / STP

CySEC CySEC

Cyprus, Cyprus,

RegisterRegister

ed also ed also

with FCAwith FCA

UK, UK,

BaFIN, BaFIN,

ASIC ASIC

(Australi(Australi

a)a)


WebTraderWebTrader

plusplus

-Mobile -Mobile

PlatformsPlatforms

-API -API

TradingTrading

-PAMM -PAMM

AccountsAccounts


BonusBonus



Forex-Forex-


MINIMUM MINIMUM






■ ■ More MethodsMore Methods


BROKERBROKER





http://cfdagent.com/brokers/xm-review

http://tradingcenter.org/index.php/component/content/article/83-reviews/291

http://cfdagent.com/brokers/hotforex-review

http://www.hotforex.com/?refid=26991


http://www.tallinex.com/open-account?i=139047

http://www.tallinex.com/open-account?i=139047

■ ■ IRON FXIRON FX

Type:Type:

ECN / STPECN / STP

CySEC CySEC

Cyprus, Cyprus,

RegisterRegister

ed also ed also

with FCAwith FCA

UK, UK,

BaFIN, BaFIN,

ASIC ASIC

(Australi(Australi

a)a)


WebTraderWebTrader

plusplus

-Mobile -Mobile

PlatformsPlatforms

-API -API

TradingTrading

-PAMM -PAMM

AccountsAccounts


BonusBonus

MINIMUM MINIMUM






WebMoney■ WebMoney■

Yandex Money■ Yandex Money■

Fasa Pay■ Fasa Pay■

Qiwi■ Qiwi■


BROKERBROKER


■ ■ FXCCFXCC

Type:Type:

ECN / STPECN / STP

CySEC CySEC

CyprusCyprus

and FCA and FCA

UKUK

Audited Audited

by by

DeloitteDeloitte


plusplus

-Mobile -Mobile

PlatformsPlatforms

-MAM -MAM

AccountsAccounts

100% Credit■ 100% Credit■

BonusBonus



Forex-Forex-


MINIMUM MINIMUM



■ ■ Credit CardsCredit Cards


BROKERBROKER


■ ■ ETX ETX

CAPITALCAPITAL

Type:Type:

STPSTP / SPREAD / SPREAD

BETTINGBETTING

FCA UKFCA UK


ETX TraderETX Trader

Pro,Pro,

WebTrader,WebTrader,

plusplus

-Mobile -Mobile

PlatformsPlatforms

25% Cash ■ 25% Cash ■

Bonus up to Bonus up to

$3,750$3,750

MINIMUM MINIMUM






BROKERBROKER



http://www.tradingcenter.org/index.php/learning/ltechnicals/forex-indicators/83-reviews/252-ironfx



https://hub.fxcc.com/register/live?fx=i-1399-S00C00

https://hub.fxcc.com/register/live?fx=i-1399-S00C00

http://cfdagent.com/brokers/fxcc-review

http://cfdagent.com/brokers/etx-capital-review

http://www.etxpartners.com/processing/clickthrgh.asp?btag=a_906b_11

http://www.etxpartners.com/processing/clickthrgh.asp?btag=a_906b_11

5. Available Financial Assets

Whatever financial market an investor wishes to trade, there is a CFD broker that will

provide it. You can find thousands of shares, tens of commodities, tens of stock indices,

and hundreds of Forex pairs. In normal conditions, an investor would need three or four

different accounts to trade all these financial instruments. However, CFD trading offers all

these market in a single trade account.

Note: In the following charts, you can see the spreads charged on a HotForex CurreneX

account. Some trade commissions are also charged in this account type (» HotForex)

Currency CFDs

Forex Majors (EURUSD spread usually starts at 1.7 pip)

Forex Minors (higher but still competitive spreads)

Forex Exotics (considerably high spreads)

Chart: EURUSD



Shares CFDs

Shares from all around the world (Europe, America, Australia, Asia)

Blue Chip Stocks

Mid Caps Stocks

AIM and Small Caps Stocks

Chart: Apple Share (MT4)

Index CFD s

Indices from all around the globe (Europe, America, Australia, Asia)

Trading the Dow Jones Industrial (US30)

Trading the S&P 500 (US500)

Trading the Nasdaq (US100)

European Indices (EuroStoxx, DAX, FTSE100, and many more)


Chart: Nasdaq (US100)

CFDs on Metals

Gold, Silver and Platinum CFDs

Copper and other Industrial Metal CFDs

Chart: Gold (XAUSD)


Energy CFDs

Trading Crude Oil CFDs

Trading Natural Gas

Gasoline CFDs

Chart: Crude Oil (CFD on Futures)

CFDs on Soft Commodities

Trading Sugar CFDs

Cocoa CFDs

Trading Wheat CFDs

Trading Cotton CFDs

More Soft Commodities available


Other CFD Types

Trading Stock market Sectors

Trading Inflation CFDs

Trading the Volatility Index (VIX)

Trading Bitcoins

Carbon Trading

Currency Indices (US Dollar Index, Euro Index, etc.)

Chart: The US Dollar Index (USDX)


6. Important Tips When Trading CFDs

These are some key tips when you are trading CFDs:

(1) Limit Your Deposits and Don't Over-Trade

Don't deposit too much on your first trading account, that can make you riskier. Deposit as

much you need to cover your initial trading positions.

If you are not fully experienced with trading, start with a practice / demo account, then

move to a micro lot account, then to a micro lot account, and finally to a standard lot

account.

There are 3 different lot sizes:

■ Micro Lot Size (1 lot equals $1,000) → Suitable for Beginners

■ Mini Lot Size (1 lot equals $10,000) → Suitable for Semi-Advanced Traders

■ Standard Lot Size (1 lot equals $100,000) → Suitable for Advanced and Pro Traders

Don't over-trade your positions. Keep as much margin you need to support your final stop-

loss.

(2) Limit your Risk & Be Aware of Market Correlations

Leverage your trade wisely. Think of your entire capital, and don't risk more than 2% on

any individual position. If you hold USD10,000 then don't risk more than $200 on any

individual trade.


In addition, when you open multiple positions be aware of the correlations between

different markets. The Gold and the Crude oil, for example, are very highly correlated to

the US Dollar Index. The Australian Dollar is highly correlated to the price of Gold, and

the Canadian Dollar is highly correlated to the price of Crude Oil. Knowing these

relationships between different markets, can make the difference, in many cases.

Example of Correlated Forex Currencies

There are some groups of currencies that tend to trade on the same direction. This is a

very strong group containing 4 pairs:

EURUSD, GBPUSD, AUDUSD and NZDUSD

Notes:

1. EURUSD and GBPUSD are correlated +0.8 to +0.9 (where +1.0 is the absolute

correlation between two assets)

Chart: The Correlation between EURUSD, GBPUSD, AUDUSD and NZDUSD

Data: Google Finance


(3) Learn to Place Pilot Orders & Pending Orders

Never open a trade position before you have calculated the cost of your stop-loss.

-For example, if you want to risk no more than $200 on a single trade, open a pilot

position of 0.01 lot, and check your stop-loss.

-If you see that the 0.01 lot trade results in $20 risk, then you now that you need to open

an additional position of 0.09, in order to risk exactly $200 in total.

These pilot orders can prove very useful if you are a beginner trader.

An alternative option, is to use a demo account, and place your pilot orders there before

you execute them on your real account.

Learn also to use pending orders.

Pending orders can save you a lot of time and can help you achieve ideal entries. In

Chapter-7, you can learn more about pending orders.

“Most professional traders use at least 80% pending orders, and only 20%

market orders”

(4) Trade What you Know

You will enjoy more success when you trade assets that you already know, especially if

you watch them closely.

Avoid the unknown, and again, use pilot orders when you trade assets for the first time.

Most professional traders are specialized not only to certain markets, but even to particular

instruments on those markets.


For example, there are many professionals trading only Gold, or only Crude Oil, or only

US30, or only EURUSD. Specialization means better information and better information

means power when you are a trader.

“Specializing in a few assets means better information, and better

information means power when you are trading the global financial

markets”


7. The Full Set of CFD Trading Orders

There are two general categories of trading orders: the market orders, and the

pending orders.

(I) Market Orders

The market orders are orders to buy immediately, or to sell immediately, at the best

available market price. That means your position will be opened straight away. The

only thing you have to do is to choose a lot size, and then to press buy or sell

button. Before executing your market order you can enter a Stop-Loss price, and a

Target price.

Image: Example of a Market Order in MT4 (Just select the Lot size and then click Buy

or Sell)


Guaranteed Stop-Loss Orders (GSLO Orders)

As market volatility and market gaping are unpredictable, there is always a possibility

that your stop-loss order will not be filled. This is happening usually after the release

of unexpected news. Therefore, some CFD brokers offer guaranteed stop-losses for a

small premium. That premium provides you 100% certainty that your stop loss will

be executed at the exact price you want.

(ii) Pending Orders

These are the main types of Pending Orders:

Limit Order

Buying or selling a financial asset at a per-determined (limited) price.

Limit Entry & Stop-Entry

Buy or sell a financial asset below or above the market at a pre-specified level.

These are the six (6) different entry orders:

(i) Buy Limit

Buy at price that is equal or lower than the price specified in the trading order.

(ii) Buy Stop

Buy at price that is equal or higher than the price specified in the trading order (useful to

place it above a resistance level).

(iii) Sell Limit

Sell at price equal or higher than the specified price in the order.

(iv) Sell Stop

Sell at price that is equal or lower than the price specified in the trading order (useful to


place it below a major support level).

(v) Buy Stop Limit

This order type is the combination of the two first types being a stop order for placing Buy

Limit. As soon as the price reaches the stop-level price indicated in the order (the Price

field), a Buy Limit order will be placed at the level, specified in Stop Limit price field. The

stop-level is set above the current Ask price, and the Stop Limit price is set below the

stop-level.

(vi) Sell Stop Limit

This order type is a stop order for placing Sell Limit. As soon as the price reaches the stop-

level indicated in the order (Price field), a Sell Limit order will be placed at the level,

specified in Stop Limit price field. The stop-level is set below the current Bid price, and the

Stop Limit price is set above the stop-level.

Image: Example of A Pending Order (MT4)


(iii) Special Pending Orders

Large CFD brokers may offer additional pending orders, such as:

OCO Order

OCO means One-Cancels-Other. Based on this order type, if a trade is executed thenanother trade is automatically canceled.

GTC Order

GTC means Good-Till-Cancelled. A GTC order remains in the market active until it iseither filled or canceled.


8. CFD Trading Rebates

What is Trading Rebate?

A trading rebate means making money from your trading volumes, no matter if you

win or lose. Every trader can join a Rebate Plan.

-You can join a rebate plan via Forex-Rebates.com, or simply by using an automated

rebate link, as those listed below.

-The rebate programs are particularly useful to day-traders, scalpers and other large-

volume traders

Example:

For example, let’s suppose you join a rebate plan offering $6 per full traded lot.

1 lot = $100,000◙

for every $100,000 that you trade you receive $6 back as a rebate◙

if you trade 50 lots in a month then you receive $300◙

Trading Rebates can be seen as a discount on your trading cost that returns back to

you in the form of cash. Joining a Forex Trading Rebate is very crucial especially for

day-traders. You have nothing to lose and at the same time you can receive real

cash.

An automatic trading rebate means a rebate that is earned directly to your trading

account without any intervention.


How Rebates Works?

Here are the 3 simple steps to join a rebate plan:

Step 1: Select a Broker (check the list in the next page)

Step 2: Open an Account via a Rebate Link

Step-3: Contact the rebate provider one-time, for confirmation (If needed)

Rebates Plans

These are some advantages when joining a rebate plan (for example, via Forex-

Rebates.com):

100% Free of Sign / No other charges■

100% Automated Rebates (Almost All)■

No Time Limits for Rebate Offers (Permanent Trading Advantage)■

You Pay the Same Spreads / Commissions as if you hadn’t Join the Rebate Plan■

No conflicts with Forex Bonus Policies and / or Other Trading Promotions■

Note: All Forex-Rebates.com plans don’t conflict with any privileges


Selecting your First Trade Rebate Plan

Here are some of the best CFD Trading Rebate Plans, from Forex-Rebates.com. In

the following table you may find details about those plans and how you can join

them. Additionally, there is information about the CFD brokers, including regulation

and account details. You can take advantage of a Forex Bonus and a Forex Rebate at

the same time.

Notes:

(1) Select always among regulated CFD Brokers

(2) Make sure the chosen CFD broker supports your own funding method

(3) Make sure that the chosen CFD broker supports the financial assets you wish to

trade

(4) Promotions (such as deposit bonuses) are useful, but don't make them your first

priority when choosing a brokerage firm

In the following table you can find several fully-automated rebate plans.


FOREXFOREXBROKERBROKER

TRADINGTRADINGREBATEREBATE

USUSTRADERTRADER ACCOUNTSACCOUNTS INFO / LINKSINFO / LINKS

◙◙ DukascopyDukascopyEuropeEurope

Branch of Branch of Dukascopy Dukascopy BankBank

■■ 30% 30% Rebate on allRebate on allcommissions commissions for the 1for the 1stst monthmonth

■■ Fully Fully Automatic Automatic Rebate Link Rebate Link (No (No confirmation confirmation is required)is required)

■■ Can be Can be combined combined with 10% with 10% Equity BonusEquity Bonus

NoNo

■■ Minimum Minimum DepositDeposit: : $100$100

■■ Fund Fund MethodsMethods::Bank Wire, Bank Wire, Credit CardsCredit Cards

Fully Automated Rebate Link. Fully Automated Rebate Link. You don’t even have to You don’t even have to contact the IB.contact the IB.

» » Learn more hereLearn more here

During registration at the stepDuring registration at the stepKNOW US FROM indicate IB-KNOW US FROM indicate IB-84118411 as your as your Introducing Introducing AgentAgent

►► Register at Dukascopy Register at Dukascopy Bank -Indicating ‘Known us Bank -Indicating ‘Known us from IB’ 8411from IB’ 8411

◙◙ HotForex HotForex

■■ $6.4 per $6.4 per Full Traded Full Traded LotLot

■■ Automatic Automatic Rebate Rebate (Confirmatio(Confirmation is required)n is required)

■■ Plus 30- Plus 30-100% Bonus 100% Bonus from from HotForexHotForex

NoNo

■■ Minimum Minimum DepositDeposit: $50: $50

■■ Fund Fund MethodsMethods::Cards, Wire, Cards, Wire, MoneyBookerMoneyBookers, Liberty s, Liberty Reserves, Reserves, MoneyGram, MoneyGram, Western Western UnionUnion

The only thing you have to doThe only thing you have to dois to register a new account is to register a new account via this rebate link and then via this rebate link and then contact Forex-Rebates.com.contact Forex-Rebates.com.


All payments will be 100% All payments will be 100% automated:automated:

►► Rebate LinkRebate Link

◙◙ InstaForexInstaForex

■■ 0.8 pip per 0.8 pip perTradeTrade


■■ Plus 30% Plus 30% Bonus from Bonus from InstaForexInstaForex

NoNo

■■ Minimum Minimum DepositDeposit: $5: $5

■■ Fund Fund MethodsMethods::Credit Cards, Credit Cards, Bank Wire, Bank Wire, MoneyBookerMoneyBookers, WebMoney,s, WebMoney,Liberty Liberty Reserves, Reserves, PayPalPayPal

The only thing you have to doThe only thing you have to dois to register a new account is to register a new account via this 0.8 pip rebate link.via this 0.8 pip rebate link.


All payments will be 100% All payments will be 100% automated (within 48 hours):automated (within 48 hours):

►► Rebate LinkRebate Link


http://forex-rebates.com/index.php/forex-rebates/finfx-trading-rebate




http://www.dukascopy.com/ibentry.php?ibref=8410



http://tradingcenter.org/index.php/trade-the-markets/library-trading-forex/forex-rebate

https://eu-live.dukascopy.com/rto/?m=register&c=individual&a=index&bi=8411


http://cfdagent.com/brokers/dukascopy-review

http://cfdagent.com/brokers/hotforex-review

http://forex-rebates.com/index.php/forex-rebates/instaforex-rebate

http://instaforex.com/en/index.php?x=FOCI



FOREXFOREXBROKERBROKER

TRADINGTRADINGREBATEREBATE

USUSTRADERTRADER ACCOUNTSACCOUNTS INFO / LINKSINFO / LINKS

◙◙ DukascopyDukascopyBank SwissBank Swiss

■■ 30% 30% Rebate on allRebate on allcommissions commissions for the 1for the 1stst monthmonth


■■ Can be Can be combined combined with 10% with 10% Equity BonusEquity Bonus

NoNo

■■ Minimum Minimum DepositDeposit: : $5,000$5,000

■■ Fund Fund MethodMethod::Bank WireBank Wire

Fully Automated Rebate Link. Fully Automated Rebate Link. You don’t even have to You don’t even have to contact the IB.contact the IB.» » Learn more hereLearn more here

During registration at the stepDuring registration at the stepKNOW US FROM indicate KNOW US FROM indicate 8410 8410 as your as your Introducing Introducing AgentAgent►► Register at Dukascopy Register at Dukascopy Bank -Indicating ‘Known us Bank -Indicating ‘Known us from IB’ 8410from IB’ 8410

Other Trading PromotionsOther Trading Promotions::

(1) Compare (1) Compare Forex Welcome Bonus PromotionsForex Welcome Bonus Promotions

(2) Compare (2) Compare Binary Options Welcome BonusBinary Options Welcome Bonus


http://binaryvalue.com/

http://www.forexbonus.info/




http://tradingcenter.org/index.php/trade-the-markets/library-trading-forex/forex-rebate



http://cfdagent.com/brokers/dukascopy-review

http://forex-rebates.com/index.php/forex-bonus/compare-welcome-bonus

http://forex-rebates.com/index.php/forex-bonus/compare-binary-options-bonus


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Find more Financial eBooks from Qexpert.com, at SlideshareFind more Financial eBooks from Qexpert.com, at Slideshare::

(1)(1) Forex Trading Guide v.2.0Forex Trading Guide v.2.0

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THE CFD TRADING TUTORIALTHE CFD TRADING TUTORIAL

COPYRIGHT INFORMATIONCOPYRIGHT INFORMATION

-FREE EBOOK--FREE EBOOK-

ALL RIGHTS RESERVED. ALL RIGHTS RESERVED.

No part of this eBook (including text, information, tables, analysis, resources and images)No part of this eBook (including text, information, tables, analysis, resources and images)may be copied, reproduced, mirrored or sold.may be copied, reproduced, mirrored or sold.

DISCLAIMER AND LEGAL NOTICEDISCLAIMER AND LEGAL NOTICE

The information presented in this eBook represents the view of the author. Every attemptThe information presented in this eBook represents the view of the author. Every attempthas been made by the author to verify all information included in this eBook, but there ishas been made by the author to verify all information included in this eBook, but there isno guarantee about the accuracy and the reliability of any information presented in thisno guarantee about the accuracy and the reliability of any information presented in thiseBook. In addition, this Guide includes affiliate links. This eBook is not intended for use aseBook. In addition, this Guide includes affiliate links. This eBook is not intended for use asa source of financial or investment advice.a source of financial or investment advice.

RISK WARNINGRISK WARNING

Before starting to trade in the Forex market, you should be very careful regarding yourBefore starting to trade in the Forex market, you should be very careful regarding yourinvestment objectives, your existing level of experience and your trading risk appetite.investment objectives, your existing level of experience and your trading risk appetite.Never trade capital you cannot afford to lose. When trading Forex, Options and otherNever trade capital you cannot afford to lose. When trading Forex, Options and otherleveraged forms of Financial Instruments there is a considerably high exposure to risk. Youleveraged forms of Financial Instruments there is a considerably high exposure to risk. Youshould be fully aware of that risk before deciding to trade in those markets. The Forexshould be fully aware of that risk before deciding to trade in those markets. The ForexTrading Leverage may work against you as well as for you. There is always a high likehoodTrading Leverage may work against you as well as for you. There is always a high likehoodthat you could lose all your funds.that you could lose all your funds.

Any opinions, research, brokers, trading rebates, links, analysis or any other informationAny opinions, research, brokers, trading rebates, links, analysis or any other informationincluded on this ebook are provided as general market commentary, and do not constituteincluded on this ebook are provided as general market commentary, and do not constituteinvestment advice in any way.investment advice in any way.

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