{"id":417,"date":"2021-08-12T22:41:54","date_gmt":"2021-08-12T20:41:54","guid":{"rendered":"https:\/\/cfd-trading-blog.com\/?p=417"},"modified":"2021-10-23T14:06:11","modified_gmt":"2021-10-23T12:06:11","slug":"ist-cfd-trading-serioes-oder-betrug","status":"publish","type":"post","link":"https:\/\/cfd-trading-blog.com\/en\/cfd-broker\/is-cfd-trading-serious-or-a-scam\/","title":{"rendered":"Is CFD trading serious or a scam?"},"content":{"rendered":"
CFDs are highly speculative derivatives whose prices depend on the price fluctuations or price expectations of their underlying assets. Many newcomers to the stock market do not dare to venture into the field of CFD trading. Some even label CFD trading as dubious. However, such a sweeping statement is wrong!<\/p>
Certainly, there are black sheep among CFD brokers that have a dubious CFD offer. But the established CFD brokers explicitly point out their regulatory authorities to which they are subject. CFD trading offered in the EU can definitely be considered reputable. However, there are some things to watch out for.<\/p>
Many traders ask themselves this question. In principle, CFDs are one of the riskiest forms of investment on the financial markets. Of course, there is a risk with every investment, but with CFDs this is amplified by the leverage effect. Not only beginners, but also experienced traders have already burned a lot - often even their entire - capital.<\/p>
When trading CFDs, it is important to proceed exactly according to plan. You should think in advance when to open a trade and where the target for it is. You also need a strategy in case the trade goes differently than planned. The risk should be precisely defined and you should determine where to close the trade in the loss and whether to stay in the trade in the event of a correction.<\/p>
Anyone can do CFD trading. The execution of a trade is done quickly - and here lies the danger for beginners. They are tempted to exaggerate instead of consciously opening their CFDs according to rules.<\/p>
CFD trading is not a scam, but it needs knowledge and a lot of practice to achieve sustainable success. Besides the danger of incurring losses due to little knowledge or uncontrolled emotions, there is a risk, especially for beginners, of falling for a fraudulent website. The achieved profits are also transferred reliably and quickly.<\/p>
ESMA (European Securities and Markets Authority) has issued strict regulations for CFD trading in the EU. A distinction is made between private and institutional traders. There are stricter limits for private traders. For example, their leverage for CFDs may not exceed 1:30 according to the regulation. By comparison, brokers from non-EU countries offer leverage of up to 1:2000.<\/p>
CFD brokers are no longer allowed to advertise bonuses to attract new customers. According to EU regulation, a distinction is made between private and professional accounts. Retail investors, in addition to the leverage restriction in the EU, also no longer have a margin call obligation, which ESMA has banned. CFD platforms must point out the risks of CFD trading and display them visibly on their platform.<\/p>
- Major Forex Pairs 1:30<\/p>
- Other currency pairs and gold 1:20<\/p>
- Main indices: 1:20<\/p>
- Other commodities and smaller indices 1:10<\/p>
- Shares 1:5<\/p>
- Cryptocurrencies 1:2.<\/p>
Unfortunately, there are some black sheep among CFD brokers. You can recognize dubious brokers by spam calls, poor or delayed execution, spreads that are too high, market manipulation or crashing of the CFD platform.<\/p>
Before registering on a platform, you should check it carefully. A good broker can be recognized by the fact that it is always licensed and regulated. As a rule, such a platform also advertises the regulation. In addition, a reputable CFD platform offers a stop-loss that limits losses.<\/p>
To be on the safe side, when trading CFDs, choose a well-known broker that has been on the market for years. Unknown providers should be avoided. A reputable CFD broker offers support to every customer. It is characterized by a wide range of markets and favorable trading fees. Its fees are transparent, with no hidden costs. The trading platform is user-friendly and deposits and withdrawals can be processed quickly.<\/p>