ATFX | Trade Hong Kong Stocks CFDs | Trade with ATFX (2024)

FAQs

How do you trade CFDs successfully? ›

CFD trading is not permitted in your country of residence: All positions with leverage are traded as CFDs, which are not permitted for some types of asset under some national laws and by the regulators governing some eToro clients' accounts.

You can open a position that will become profitable if one of your other positions begins to incur a loss. An example of this would be taking out a short position on a market that tracks the price of an asset you own. Any drop in the value of your asset would then be offset by the profit from your CFD trade.

A contract for difference (CFD) allows traders to speculate on the future market movements of an underlying asset, without actually owning or taking physical delivery of the underlying asset. CFDs are available for a range of underlying assets, such as shares, commodities, and foreign exchange.

2. CFD Traders Reducing risk exposure. One of the main reasons many traders fail is the lack of risk management strategies. By failing to adopt certain risk management techniques and simply opening trades without protecting their trades with take-profit and stop-loss orders, they risk losing all their trading funds.

CFDs are illegal in the US because they are an over-the-counter (OTC) trading product. OTC trading products aren't listed on regulated exchanges like the New York Stock Exchange (NYSE), bypassing US regulatory bodies. However, US traders have alternatives such as forex, options and stocks.

As previously mentioned, trading CFDs in the U.S. is illegal. This is because they are an over-the-counter investment product that can't be regulated by traditional financial institutions. But the good news is, trading CFDs in the United States is only illegal for citizens.

CFDs are illegal in the US and Hong Kong but in other countries, they can be traded under strict regulations. In such countries as Austria, Cyprus, France, and Australia, CFD trading is legal but certain regulations are in place to protect the parties involved.

So, even if you are a great trader, if you don't have enough funds in your account then you won't make a lot of money. Profitable CFD traders who pursue trading on a professional level aim to make around 10% to 20% of their annual salary.

Does anyone make money with CFDs? ›

As CFD trading continues to grow, tales of making large sums have increasingly been bandied about. However, like forex trading, the reality is that success is not guaranteed. Becoming a successful trader takes a lot of hard work and a sound approach to the CFD market.

CFD trading can be attractive to beginner traders, but it also involves significant risk. First, beginner traders should make sure they understand the basics of CFD trading, including leverage, margin and stop-loss orders. It's also crucial to choose a reputable and regulated CFD broker.

Another primary difference between CFD trading and gambling is importance placed on risk management techniques to minimise loss. CFDs are highly leveraged financial derivatives afterall. So while the potential for making huge wins is possible, so too is the risk of making massive losses.

Commissions start at 0.5 cents per US share and 0.05% on all other share CFDs, with lower rates available for active traders. Overnight financing charges start at benchmark +/-1.5%, with lower spreads available for larger balances.

So, even if you are a great trader, if you don't have enough funds in your account then you won't make a lot of money. Profitable CFD traders who pursue trading on a professional level aim to make around 10% to 20% of their annual salary.

Firstly – CFD trading is hard.

It's possible to make money trading CFDs with experience and a thorough understanding of how the financial markets work. But, it's well known that around 75% of retail traders (private investors) lose money when trading CFDs.

CFD trading is a high-risk proposition with the majority of traders losing money. What many of these platforms don't tell you is that around 70% – 80% of all traders end up losing money with CFDs. It's a volatile market with whipsaw price movements all the time.