Compared to any other financial market, the forex market is one of the easiest to enter. We can easily attribute this to the sector’s high level of liquidity and daily influx of trades. Also, being an over-the-counter market makes it a financial scene with little to no regulation and good central autonomy.
The accessibility of forex has dramatically lowered the barrier of entry for investors, which is why there are more retail traders in the market nowadays than institutional traders. Another major factor contributing to this is the accessibility to any market through mobile devices. For retail traders looking to get into the CFD market and buy and sell using smartphones, here is a detailed guide to get you started.
CFDs and How To Trade Them
CFDs are considered one of the safest investment options for traders because they allow investors to benefit from the potential increase in an asset without owning it. They are contracts between an investor and a broker to exchange the difference in value of an asset between the time the contract starts and ends.
Although generally regarded as safe and profitable, CFDs can be rather complex for beginners. In CFD trading, parties place bets on an asset’s potential increase or decrease and earn money upon making the correct speculations.
The assets in question can be stocks, indexes, commodities, currencies, and sector CFDs. Mainly, they involve two trades: the open position and the closing. If the opening trade starts as a buy, the closing trade will be a sell, and Vice versa. CFD trading is a leverage, meaning you can get total market exposure without depositing the entire capital.
For example, you can open a $2000 position on a CFD on Meta shares by depositing a 20% ($200) margin. Trading CFDs works through the same processes of buying and selling other investment assets. The idea as a retailer is to get a broker or forex trading platform that makes it easy for you to execute your trades. You can do this on your mobile devices and your PC or desktop.
How To Trade CFDs on Your Mobile Phone
The first step to trading on your mobile phone is the same as starting investments in the forex market. It begins with getting a reputable broker.
Sourcing a Reputable Broker
The first step is getting a reputable CFD broker to help execute your trades. Ensure this broker offers a secure, effective trading platform suitable for mobile usage. The trading app should be licensed with a user-friendly interface with security features and provide a wide range of tradable CFD assets.
Open and Fund Your Trading Account
Once your trading app or platform is secured, open an account and start the registration process. This would require basic personal information for verification processes. Also, be on the lookout for brokers’ terms and conditions. Read this from cover to cover to be sure what you’re getting into.
The following line of action is to fund your account using the mobile app. Most brokers allow you to do this through bank transfers, credit/debit cards, and electronic wallets. Deposit your fund through any of the provided options and start trading.
Explore Demo Trades For Practice
Every expert forex trader today once started with demo trades. Try trading CFDs through the demo trading option on your mobile app to become familiar with it. The demo mode allows you to trade virtual funds and get hands-on experience on how trading works. Remember, there are different markets and various ways to sell them. Markets to explore include shares, indices, forex, crypto, commodities, and ETFs.
Choose an Option: To Buy or Sell
As we’ve established, CFD trading requires you to take a position. Decide on the position you want to take in an underlying market, whether long or short. Take a position in your margin based on market conditions and your detailed analysis. Ideally, you choose to buy when your analysis suggests a possible increase in value and sell if you think the asset price will fall.
Monitoring Your CFD Trades
Once you’ve opened your trade, you can watch it perform in real-time through your mobile app. Most trading platforms have a “close” button that enables you to close your position once you are comfortable with the profits you’ve made. There are many benefits to trading CFDs on your smartphone.
The most obvious of them is the accessibility it gives investors and how it helps you stay on top of things regardless of their location. You can track your progress and utilize the time factor to your advantage. Once you’re comfortable with this, you can explore other advantages of CFD and other forms of trading with your broker.