Financial Market Knowledge
Financial Market Knowledge


FOREX and CFD trading have many advantages, including margin trading, high liquidity and flexible trading period from Sunday to Friday.


Leverage

Leverage trading is major characteristic of FOREX trading. A very low initial deposit is required to start trading. Our minimum margin requirement is 0.25% and leverage is 400:1. 


Margin trading allows you to use your capital more efficiently, because you only need to provide a certain percentage of the total value of the position to be able to participate in the market. This essentially means that if market changes in your favor, the potential profits will increase; if the market changes against your favor, the potential losses will increase as well.


24 Hours Market

Price fluctuation movement available in FOREX market 24 hours a day. Therefore, any trading strategy hold the possibilities to identify trading opportunities. Moreover, market keeps on changing, active trading management and the use of appropriate risk management tools are needed.



High Liquidity

FOREX market is the world's most traded financial market with an average daily trading volume of $5 trillion. Due to the large number of global market participants trading at any one point on trading day, which make FOREX market is more liquid than other financial markets.


Comparison with Stock Market

Please refer to the table below, to understand the difference between CFD trading and stock market, and pick the trading form that suits you best.


Characteristic

CFD Trading

Stock Market

Can Long – Take advantage of stock price move up

YES

YES

Can Short – Take advantage of stock price move down

YES

 

Can Arbitrage – To reduce portfolio potential risk

YES

 

No Stamp Duty*

YES

 

High Leverage – Only invest small portion of product value

YES

 

Instant Trading – Quick entry and exit market

YES

YES

Access to other asset types – example: indices, FOREX, etc…

YES

 

Global Stock Markets – Can trade different stock exchanges stock

YES

YES

Receive dividends and interest adjustments

YES

YES

Actual Ownership – Eligible to participate in shareholders meeting

 

YES


No Stamp Duty

Unlike cash stock trading, CFDs are derivatives that allow you to take advantage of price volatility in thousands of markets around the world, including stocks, and without actually owning the real assets. As a result, there is no need to pay stamp duty. 


LONG or SHORT

CFD allows you to set up position (LONG or SHORT) according to your expectation of the assets value is up or down with a very low threshold, as compared to stock trading. Therefore, if you assumed Facebook stock price is overvalued, you can open a short position immediately.


When market direction/trend matches your forecast, the more profits you can earn. While market direction deviates from your prediction, you will suffer losses.


Please take note that, in CFD trading you are trading against the market prices rather than specific assets.