CFD Trading for Beginners - Learn how to trade CFD with nextmarkets

Last updated: 20.05.2020
Christian Kuehn
Author:
Christian Kuehn
Adviser
CFD & Trading
Experience
> 20 years

One of the most popular forms of derivatives trading, CFD trading allows you to trade on numerous different markets and financial instruments. CFD traders regularly use share markets, indices, commodities, stocks, treasures and Forex so there is plenty of scope for trading in your particular area of interest.

As a form of leverage trading, you’ll have the opportunity to make returns which significantly outweigh your initial investment, although losses can exceed your original outlay too. Regularly used by professional traders on nextmarkets, CFD trading is a popular way to make money from the markets and it’s open to beginners too.

nextmarkets investors

CFD trading for beginners with nextmarkets

Almost anyone can trade in CFDs on nextmarkets and there is plenty of help available if you want to know more about CFD trading for beginners. As with all types of investments, it’s important to understand how the trading platform works before you make any trades. Furthermore, you’ll want to ensure you understand exactly how CFD trading works, how the markets differ and what are stocks in order to increase your knowledge and reduce the risk associated with trading on the markets.

Before you get started, why not take a look at some of the trading examples set out by our online coaches? With detailed analysis and guides, you can find out exactly how CFD trades are executed and how to trade CFDs successfully.

CFD Trading Software

Learn how to trade CFDs with nextmarkets

If you want to learn how to trade CFDs, one of the quickest ways to do so is to open a demo trading account. This allows you to familiarise yourself with the trading platform without the risk of losing any money. As well as ensuring you know how the nextmarkets CFD software works, you can also get an insight into which CFD trades provide a return and which result in a loss.

The practical aspect, such as the mechanics of the CFD platform, is just one element of learning how to trade in CFDs. Once you know how the software works and how to actually make trades, you can begin to understand the theory behind CFD trading and how it can bring you significant returns.

How to get into CFD trading with nextmarkets

CFD trading on nextmarkets is open to almost everybody and you don’t need to be an experienced broker or professional trader in order to make a profit. Although investing in the money markets may seem complicated at first, you needn’t worry how to get into CFD trading. With numerous guides, hints and trading examples available, it’s easy to learn how to trade in CFDs.

Before you start trading, do as much research as you can. Knowing how the different markets work and what types of events can impact market behaviour will stand you in good stead if you want to start trading in CFDs. Once you understand the basics of CFD trading, you’ll be able to learn about the different CFD trading strategies used to increase the potential returns available.

Trading software by nextmarkets

How to learn to trade CFDs successfully

If you’re eager to get started, it might be tempting to start making trades and investments straight away. However, this could put your investment at risk and you could stand to lose a considerable amount of money if you’re too hasty. It’s important to take the time to educate yourself and find out how to learn to trade CFDs successfully.

Furthermore, all the information you’ll need is available free of charge on the nextmarkets website. As well as step-by-step trading guides and glossaries, you’ll have access to trading suggestions from experienced traders. These professional traders have varied trading experience and you can use their expertise to build your own CFD trading strategy and style.

Fact Check

  • CFD trading requires you to predict whether a price will rise or fall
  • Leveraging your trade means you can make or lose more than your actual investment
  • Available across lots of markets, you can trade CFDs on stocks, shares, currencies and much more through nextmarkets
Day trading for beginners

What is CFD trading?

Asking ‘what is CFD trading?’ is a great place to start if you’re new to trading on the markets. Known as ‘Contract For Difference’, a CFD trade is comprised of a contract to exchange the difference in value of an underlying financial market. Whilst this may sound like a complicated definition, CFD trading is far simpler in reality.

When you buy stocks and shares in a company, for example, you take ownership of the stocks and shares that you buy until you choose to sell them. With CFD trading, however, you never own the financial instruments, such as CFD stocks, upon which you’re trading. Instead you can make a profit or loss from how much the price of your chosen instrument changes whilst the contract is still ongoing. nextmarkets offers a wide range of CFD products to make the trading journey efficient and enjoyable.

Free Forex Software

Making a profit from CFDs

Whatever market you plan to trade on, making a profit from CFDs is what all traders are aiming for. In order to do this, you’ll need to predict which way the price of a financial instrument is going to change. If you think the price of a particular stock will rise, for example, you would place a CFD trade to ‘buy’ at the current price offered and ‘sell’ at a later date, when the price will have risen.

Of course, if you predict the price change incorrectly, you will lose your initial investment and you could face losing more than you have originally deposited. The key to successful CFD trading, as with most types of investment, is to accurately predict how prices will change. These changes can then be facilitated on the nextmarkets app.

How to trade CFD UK through nextmarkets

Many UK traders opt to trade in CFDs because of the high profits which can be made from successful investments. Knowing how to trade CFD UK stocks and shares may mean that you want to trade in CFDs using the FTSE, although plenty of other markets are available too.

In order to place a trade with nextmarkets, you simply decide whether or not you wish to accept the price you’re being offered. If you do, you can make a trade within seconds by stating how many CFDs you want to trade and confirming your decision to ‘buy’ or ‘sell’ a particular instrument, such as a stock or currency.

Learn how to trade with nextmarkets

Using a CFD trading guide

New traders and amateur investors on nextmarkets may find it useful to have a CFD trading guide to hand when they first get started. There are plenty of new terms to learn when you first start trading CFDs, so it’s always a good idea to have a glossary and a selection of trading tips available.

As well as showing you how to actually make a trade in terms of the software used and the platform functionality, a good trading guide will provide a range of trading examples and highlight the rationale behind the trader’s decision-making process. Whilst it’s important to understand the mechanics of a CFD trade, understanding the theory and strategy behind a trade can be the difference between making a profit or a loss.

Choosing a CFD broker

If you plan on investing or trading on any market, it’s essential that you have a reliable and reputable broker. CFD trading is not as highly regulated as some other types of investments, so an established broker with an unblemished reputation should be your first port of call. Of course, the best CFD broker will provide more than just a CFD trading platform.

A good CFD broker will offer a range of services and these should enhance your trading behaviour and increase your chances of making successful trades. A broker which offers a CFD app, for example, will ensure you can trade quickly and from any location. Similarly, a CFD broker PayPal could make it far easier for you to make trades. By offering PayPal-based account management, your broker will ensure you can make deposits and withdrawals easily, without long waiting times. At nextmarkets, traders have access to a number of payment options and products.

Forex App by nextmarkets

A beginner’s guide to CFD trading online

Although different markets have varying trading hours, some CFDs can be traded on a 24-hour basis. A beginner’s guide to CFD trading online will tell you exactly when you can trade on specific markets, so you’ll know what’s available to you and when. Once you’ve opened your CFD account with your chosen broker, you should have access to all the support you need.

Of course, you don’t have to start trading with a real money account straight away. The nextmarkets demo account offers CFD trading across numerous markets, EUR 10,000 to try out your trading ideas, free notifications and access to trading suggestions and market analysis. Build up your knowledge and experience using a risk-free demo account before you start trading with a nextmarkets real money account.

Going long or short with CFDs

Although CFD trading doesn’t involve owning the instrument you’re trading on, the terms ‘buy’ and ‘sell’ are routinely used to indicate which type of trade you’re going to make from your nextmarkets account. Going long refers to ‘buying’ the price with a view to it going up, whilst going short refers to taking the offered price with a view to it decreasing.

If a particular stock has a market value of 1.00, for example, you may be offered different prices. If you go long and the market price increases to over 1.10 you will make a profit, providing you end the contract at the right time. Similarly, if you go short and the market price drops to below 0.90, you’ll make a profit as long as you end the trade before the price increases to 1.00 or above.

how to trade CFD

Did you know

  • Mobile CFD trading can increase accessibility to the nextmarkets trading platform
  • A free demo account can help you learn how to trade in CFDs
  • Real-time market quotes and notifications can help you keep track of your CFD trades

Start CFD trading on nextmarkets

If you want to start CFD trading, you’ll need to open an account in order to do so. Registering with nextmarkets is quick and easy to do, and you won’t require lots of unnecessary documentation or checks. Following a simple verification process, you could start trading on the markets as soon as you like.

Remember – you don’t need to be sitting behind a computer in order to trade in CFD. With a dedicated CFD app, you can trade on the go. Designed for use on iOS and Android devices, the nextmarkets trading app works alongside our web platform, you so can trade in CFDs from practically any device.

Free share trading software by nextmarkets

CFD trading tips

Markets can be subject to rapid fluctuations so it’s important to stay on the ball once you’ve started trading in CFDs. If you have an active CFD trade, it’s vital that you keep track of whether the price of the instrument, such as the stock, is rising or falling so that you can close the trade at the right time.

Setting a stop loss on your nextmarkets account is one of the most popular CFD trading tips because it can help to mitigate risk and minimise losses. When you set a stop loss, you’re simply setting a level at which the trade should close automatically. If you go long and the stock price drops, for example, a stop loss could prevent you from losing too much money.

Help for CFD trading beginners on nextmarkets

Investing in the markets provides a great opportunity to make significant profits in a short period of time, but there is a risk of incurring losses too. Take advantage of the help for CFD trading beginners as this can improve your trading strategy and help you to be more successful in the long-term.

Following real-time trading examples is a useful way of determining how the markets work and what triggers may indicate a profitable trading opportunity, for example. With multilingual help available on a 24-hour basis, nextmarkets is committed to providing exemplary customer service and we’re always happy to assist clients. If you want to find out more about the nextmarkets CFD trading platform, why not get in touch with us?

best trading app

How to get started in CFD trading

Although you could start trading with a real money account, if you’re new to investing and you want to know how to get started in CFD trading, a nextmarkets demo account might be the right option. With no time limits, you can use your free demo account until you feel confident enough to start trading with your own funds. Simply choose the market you wish to trade on, select the instrument you want to trade or trade on the market value as a whole, decide how many CFDs you want to buy or sell and add a stop loss to minimise potential losses; it’s as simple as that!

Leveraging your CFD trades

Trading in CFDs is a leveraged form of trading which means you get returns which are far in excess of your initial investment. If you want to buy or sell 100 CFDs, for example, leveraging your trade means you won’t have to deposit the full amount. If your trade is successful, the actual cost of the trade (i.e. the buy or sell price of each CFD) will be taken from your profits.

However, leveraged trading means you could lose more than your initial investment too. Whilst you may only deposit a specific amount into your nextmarkets CFD account, you could lose more than this and be required to add funds in order to cover the loss. Adding a stop loss to your trade or manually closing the trade before the prices go too far against your prediction will help to minimise losses.

Register for a nextmarkets CFD trading account now

With limitless potential, CFD trading can be a full-time occupation, a part-time endeavour or simply a profitable hobby. However you plan to approach CFD trading, there are trading tips and strategies to suit your needs. New traders may prefer to make short to mid-term trades, for example, as they can be easier to keep track of than longer term investments.

If you want to make money from CFD trading, why wait? Register for a CFD trading account now and you could be making trades from a demo or real money account in no time at all. To find out more, contact us at nextmarkets or sign up today.

Online Trading for Beginners
Smarter CFD & Forex Trading
  • 1000 CFDs on indices, shares, cryptos, and bonds
  • Up to 100 trading ideas per month in real time
  • Free & unlimited demo account
x