What are CFDs?

contracts for difference

What are CFDs about?

What does this term CFD mean in finance?

Well, in this guide I will tell you in depth what these CFDs are in the stock market, how they work, and most importantly, how to operate them efficiently.

Because, believe me, there are several ways to operate them, but some more efficient than others; for the trader, it is understood.

What is a CFD?

These acronyms correspond to contract for difference.

The term is quite defining since it tells us that we are facing a financial contract, in this case OTC type (Over The Counter). This OTC term means that they are not traded on regulated markets.

As with any contract, we will have two parts: in the case of finance, the issuer and the buyer of the contract.

The issuer will be the broker and the buyer will be the trader.

This part of the contract is very important because it is what differentiates these assets from others in the field of investment and financial trading.

For example, in the trading of financial options (another asset) we are acquiring a title for which (the transaction) the broker charges us a commission.

In the case of CFDs, I repeat, we are acquiring a contract between us and the broker directly.

Why?

Well, because the broker, or another broker or liquidity provider, is the one that is managing the price of that CFD.

 

To see the difference, in a financial option, the broker does not manage the price of the same, but depends 100% of the market.

The second term, “difference”, is what describes the purpose of the transaction.

That is to say, the broker or issuer of the CFD undertakes to return to the buyer the difference between the initial purchase price and the final price at the time of sale.

What was the origin of the CFDs?

origin of cfds

These contracts were created in the early 90s of the last century in London by Brian Keelan and Jon Wood who worked for UBS Warburg.

These OTC (Over The Counter) contracts appeared to facilitate coverage in the English equity markets that already had significant costs such as “stamp duty” at the time.

With these contracts, institutional investors could cover and use the short side of the market more easily than the cash equity market allowed; and all this using only a small margin.

However, it was not until afterwards, when the CFDs showed their greatest utility: their appearance in the markets of private traders, with a spectacular boom in the years 2000 in the United Kingdom and Australia, then in Europe and finally in good part of the world. Although it should be noted that as a product it is prohibited in the United States.

Why do I say this about the greater utility of CFDs?

Read the following section and you will understand.

How do CFDs work?

The CFD is a synthetic product that is formed to track the price of a financial asset, which can be: share, future, stock index, commodity, currency, cryptocurrency, bond, financial option, etc.

Basically this works in the following way:

The broker analyzes the market and sees that to operate the S & P500 there are different possibilities:

  • Operate the future
  • Operate the financial options of the SPY (ETF of the S & P500)
  • Operate the ETF

As I already explained exhaustively in the futures and financial options articles, these securities are of a fairly large magnitude and are not recommended for the trading of small investors or traders.

For investors and professional and institutional operators there is not much problem in operating these assets because their accounts are measured in hundreds of thousands and millions of dollars.

The case of private traders is different, and this is where CFDs acquire the importance they have today in the world of trading.

The ETF is an instrument that allows more flexibility but still usually has significant commissions for small volume, and is also an instrument without leverage, which makes it unattractive to most traders.

Therefore the broker decides that he can create a contract by difference of the S & P500, in which he will apply a difference between that contract and the official price, in such a way that the broker has an incentive to make money and the trader, if he considers that the contract is fair, you can earn money if you correct the direction of the market.

For example, the future price of the S & P500 is 2,700.25 / 2,700.50.

The broker decides to offer a CFD for that future but with a price of 2,700.15 / 2,700.60.

The first of the prices is the sale price and the second is the purchase price.

As we can see, the difference between the sale and purchase price (the spread) is higher in the CFD compared to the future quoted on the official market.

That difference is what the broker or issuer of CFD will get as a commission and is what motivates you to offer such a contract.

But why operate the CFD of the SP & 500 instead of the future if it has a cheaper operating cost?

Well, from what I said before: because the future of that asset is a contract with a nominal value that normally is worth 100,000 dollars or more, while the CFD can negotiate it with a nominal value of what the index, that is, in that example, about $ 2,700.

For example, if we have an 800 dollar account, something that the vast majority of private traders can have, you will be more interested in operating the CFD.

With that kind of money, do not even try to try it in futures markets because you will not last long.

In my opinion you should not try to trade futures with accounts of less than 40 or 50 thousand dollars, and even then it would be better to know what we are doing.

For example, with a $ 5,000 account I can operate the S & P500 index, gold, EURUSD, Apple, Inditex and even Bitcoin at the same time in a very efficient way if I do it with CFDs.

With futures to operate those assets we would need an account of no less than $ 100,000 in my opinion.

That is why the success of CFDs for the particular market of traders is logical.

CFD example

cfd example stock trading

Let’s see a simple example of how CFDs work.

In this case we choose the trading with CFDs of Santander shares, one of the most popular shares of the Spanish market.

We assume that we are a trader from that country and that we have an account of 2,000 Euros.

Santander quotes as follows: 4,036 / 4,044.

I think Santander is going to rise in the coming weeks and buy 1,978 CFDs of Santander shares.

In this case I would be making use of the 4: 1 leverage for what would be an accepted operation (the maximum leverage can be 5: 1).

As I buy 4,044 the value of my position is 7,999.03 Euros.

In this case I do not pay extra commission but look at one thing:

If I decide to sell instantly I will liquidate the 1,978 to 4,036 (assuming the price has not moved yet), which would give me a value of 7,983.20.

I would have lost 15.82 Euros.

That would be the commission that the broker of CFDs applies to me, since it does so in the form of a spread.

This is so that we see that CFDs do have commissions, even if they come in the form of a spread in most cases.

Well, we forgot this example of the instant sale and we assume that we held the position for a few days.

The price started to rise the following days and went to 4.4 euros 5 days later, when we decided to sell and collect profits.

We sell the 1,978 CFDs to 4.4, obtaining: 8,703.2 euros.

The gross profit would be: 8,703.2 – 7,983.20 = 720 euros.

To that figure we would have to subtract the cost of the swap (financing) of those days. Let’s suppose that the annual financing cost is 8.57%. If we apply that cost to 5 days we would have approximately 9.3 euros of expense.

Total net result = 720 – 9.3 euros (swap) = 710.7 euros.

That’s a return of 35.5% for our initial 2,000 euros account.

If we had done the operation with cash shares we would have obtained an approximate yield of 8.7%.

As we see the difference is significant.

But of course, do not think you’re going to win forever.

Just like you can win you can also lose.

Are CFDs secure?

guide about cdfs

The fact that these are OTC contracts not operated in centralized markets means that they are left to the discretion of the broker with whom we negotiate.

That is, the transactions between the client and the issuer of CFDs will not be registered in any independent body, which means that there is the possibility that some broker may decide to cheat and manipulate the prices to earn more money.

That, unfortunately, is possible.

Fortunately, today, brokers that are registered in regulations of advanced countries are quite transparent with the offer of their prices in the CFDs.

That is why it is very important that when negotiating CFDs we try to choose prestigious brokers as the great majority of those that are regulated in the United Kingdom, Australia or Spain, for example.

In many cases and in the best brokers we will be able to operate with real market prices, and the only thing the broker does is charge us a higher commission, either in terms of rate or spread.

With regard to the security of trading itself, it is obvious that as financial instruments that are, they are not entirely safe, since we are in some instruments that involve risks.

That is, they are dangerous products and that danger is greater because they allow the use of negotiation with leverage.

Traders who decide to negotiate know that they are markets in which you can win or lose.

Imagine that it was not a “dangerous” market, in which you can not lose your money.

But the problem of a non-dangerous market is that you’re not going to make money either.

So:

What incentive would we have to try to negotiate?

None.

Risk implies danger but also implies higher profit possibilities.

Any product with leverage is dangerous:

  • Futures are dangerous too, in fact for small traders they are much more dangerous than CFDs (because of what I said before the size of the contracts)
  • Financial options are very dangerous too
  • Warrants are dangerous
  • The one who borrows 50,000 dollars to start a business is also doing something very dangerous: the business may not work and end up ruined owing $ 50,000 to the bank (which happens quite often because most companies close after a while)

The stocks, bonds or ETFs, although they do not have leverage are also dangerous, but obviously less. Although it depends on what actions we negotiate as well. For example, if we negotiate penny stocks we can double the account or lose 100% of our money in a matter of days.

Therefore, they are dangerous products but so is any form of entrepreneurship that requires putting money.

ESMA CFD  European regulation 2018

CFD brokers are registered with the main regulators of the world.

In countries like the United States, as I said, they are not allowed.

The most important regulation regarding these markets has come from the hand of Europe, the region with the most tradition in these contracts, especially the United Kingdom.

This regulation implemented in 2018 by the ESMA requires CFD brokers to declare the number of traders that lose each quarter in all their ads and their respective websites.

Like many of the state regulations, this regulation has a totally paternalistic character, with the supposed objective of protecting the traders of products that are very dangerous.

It is true but as I said before, it is also dangerous to operate: futures, financial options, warrants, et cetera.

In fact, I am sure that the numbers of losing traders in futures and financial options are similar to those in CFDs.

Leverage of CFDs

The other great point in which the ESMA affected the CFDs in Europe was the fact of reducing the maximum leverage of the instruments, with the aim of making trading less dangerous.

In this way, the leverage for European brokers and traders after 2018 was as follows:

  • Older Forex pairs: 30 to 1 (stay with this detail that I will explain later)
  • Minor Forex pairs, gold and major stock indices: 20 to 1
  • Lower indices and raw materials: 10 to 1
  • Actions: 5 to 1
  • Cryptocurrencies: 2 to 1

However, this only affects those who reside in that area.

It does not affect brokers or clients that reside or have subsidiaries in other areas of the world.

For example, Australian brokers offer unrestricted leverage to the world’s traders.

In the same way, Latin American customers can open accounts in brokers from the rest of the world without restrictions either.

The typical leverage that occurs in these international brokers ranges from 100 to 200: 1, with even higher cases.

However I have to say that these leverages are totally unnecessary.

I do not agree with the ESMA regulations, because it basically damages the European CFD industry, in favour of those of other regions and of international futures and options brokers.

But with the leverages that have been imposed in Europe it is still possible to make effective trading without problems.

Another thing would be that they decide to further restrict leverage, in which case the European CFD market would risk disappearing.

CFD market

CFDs allow us to operate in almost all of the world markets.

There are brokers that only offer CFDs from specific markets but other global CFD brokers offer us trading in almost all markets.

An example is Plus500, one of the big world brokers where we can negotiate CFDs of indices, currencies, raw materials, stocks, options, and so on.

All these markets are offered in CFD format and are offered by this British broker to traders from all over the world with the leverage conditions of the ESMA.

One piece of advice I give you is to look at the prices of the CFDs of some product in different brokers and compare them with those of the official market.

In all these brokers you will see that most offer slightly different prices, and that the same, in many cases are not the same as the cash assets.

These differences tend to be minimal but it is a way in which you can see that you are negotiating in these types of markets.

Let’s look at how CFDs trading in the most popular products is summarized.

CFD currency

What is a CFD in Forex?

If you looked at the ESMA’s leveraged equipment, you saw that I put a note regarding the restriction imposed on the currency.

This restriction is important to understand the dynamics of retail Forex trading at a European level, not only at a global level.

This I say because there is a kind of myth that says that the Forex is the largest market in the world and things that do not honour the truth, or at least not from the point of view of the trader.

That is, when the retail trader negotiates the forex market in a typical Forex broker it is because that trading is in CFD mode.

What does this mean?

That the trader is not negotiating “the biggest market in the world” but a contract of the price of a particular currency with the broker in question.

In this sense, the broker works as the example I explained at the beginning of this guide.

The price of the EURUSD in the interbank market may be at 1.31105 / 1.31106.

What the CFD broker or the issuer of the CFD of the EURUSD does is issue a contract that follows the price of that asset with a higher spread (or a commission) that could be left with this purchase-sale price: 1.31102 / 1 , 31108.

Why do I tell this?

Well, because if you realize practically all of the brokers in Europe have to implement the maximum leverage of the ESMA for the trading of currency CFDs, which means that the Forex they offer is CFD, that is, over the counter

The broker can say what it wants, if it is ECN, if it is DMA, or anything else, but in the end what he is offering is a CFD contract.

So, we clarify things a little.

That said, trading Forex CFDs is perhaps the most popular in the world because it is a huge market in the retail trading world.

In fact, this OTC Forex market was the one that made automated trading popular in the world of private traders.

Forex trading is concentrated in the major currency pairs: EURUSD, GBPUSD, USDJPY, EURJPY, USDCAD, USDCHF, AUDUSD, and so on.

The advantage that it has is that most of the brokers allow negotiating contracts called micro, which is of a size of 1,000 units.

Whether we are in Europe, with leverage of 30: 1, or if we are abroad, with a leverage of 100 or 200: 1, it is a type of trading that allows operations to be carried out on accounts of hundreds or a few thousand dollars or euros of a very efficient way and with very low trading costs.

In this last point it is true that being a highly traded market has made CFD brokers have acceptable trading conditions with low spreads and commissions.

Now, do not believe that it is easy to earn in them.

The Forex market is a lot more complicated than it seems at first glance and you will have to train a lot before you can be a competent trader.

CFD on stocks

These are the CFDs that made this market famous; those who made such contracts appeared in the United Kingdom decades ago.

In fact, the early years of CFDs in Spain, for example, revolved around the trading of stock CFDs, by classic brokers in the sector such as Hanseatic Brokerhouse (now defunct).

Today they are still very popular CFDs but they do not have the leverage of yesteryear that in cases could reach up to 20: 1.

The current leverage, as we saw with the ESMA, has remained at 5: 1, but it is still more than enough to make dynamic and powerful stock trading strategies.

The advantage of this type of trading of CFDs is that in many brokers it is allowed to buy very flexible stock packages without having to pay high minimum commissions, as it happens in many brokers of cash shares.

For example, in a typical stock CFDs broker Apple can quote at 165.00 / 165.30. In that same broker I can buy an Apple CFD for 165.30. The cost of the operation would have been the difference: 0.30 USD.

It is an acceptable cost.

In contrast, the typical spot stock broker will require a minimum fee of USD7 to buy an Apple stock.

Yes, Apple may quote at 165.00 / 165.05; which is a much lower spread.

However, as we can see, trading for small accounts in cash share brokers is more complicated.

Not to mention that in these spot brokers we cannot operate with that leverage of 5 to 1.

As a disadvantage of CFDs is that we will have to pay a financing rate (swap) for each day we keep the position open, so any smart trader will have to study how long he can afford to hold the position before it becomes too much face.

Obviously, if we want to negotiate a large number of securities and we have a very large account, it is probably better to trade the shares in cash.

Now, if your account is a few thousand euros it is more likely that trading CFDs of shares is more appropriate. Of course, always with caution and conservative trading.

The trading of these assets in CFDs should be done only by those who have experience.

CFD on indexes

how to trader index cfds

These CFDs have become very popular over the years, so that almost all brokers offer them as one of the essential products, along with currency, and some commodities such as gold or oil.

The operation is simple.

It is about following the spot price of the main world indexes in the most used modality.

And CFDs are also offered on index futures, in which case what is offered is the price of the corresponding future.

The popularity of these CFDs is largely due to the fact that they are contracts with a nominal value that is much smaller than the ones offered in futures.

This makes them more affordable products for the retail trader, without a doubt.

In addition, most of the brokers offer trading without extra commissions, but only with the spread, which is another important advantage as we will not have entry barriers with prohibitive minimum commissions.

From my point of view they are very good instruments for trading and training as a speculator, at the same time as enjoying acceptable conditions.

CFDs commodities

As in the previous case, these contracts follow the price of spot or futures prices of the most popular commodities in the world.

However, raw materials are not the most followed markets worldwide and most of them are not operated too often.

Only gold and oil are traded and followed by global traders significantly.

The advantages of these instruments, again, have to do with the size of the contracts, which in the case of gold are usually one ounce.

With this we can negotiate positions of about 1,000 or 1,500 dollars in value with only having 50 or 75 USD (margin).

The trading of the rest of commodities is a little more expensive and is not too attractive to, although there are some exceptions in certain brokers.

Cryptocurrency CFDs

how to trade criptocurrency cfds

This new player in world markets has been quickly adapted by CFD brokers.

The principle of offering these products is the same as in the previous cases.

The CFD brokers follow the main exchange houses in the market and offer the contracts of the respective cryptocurrencies with an increase in the spread to obtain a commission.

Normally the trading of these cryptocurrency CFD contracts is a little more expensive than that of exchange houses, but on the contrary these brokers have an enormous advantage: they are regulated and are not victims of hacking.

For those who do not know the cryptocurrency market, it is the victim of continuous hacking and theft by hackers who get into the systems of exchange houses and are able to steal these currencies.

This does not happen in the brokers of CFDs which work through the bank accounts of the clients, so it is almost impossible for a hacker to pass these security measures: the broker will not withdraw the money if it is not to the bank account initially checked by the customer.

This makes many people prefer to invest and speculate in cryptocurrencies with these brokers instead of exchange houses.

The advantage of the leverage is not so much because in fact many of the brokers of CFDs do not offer this concept and also many exchange houses do offer. However, with the volatility of these markets we can be sure that we do not need to use this concept, at least for now.

CFDs about options

These CFDs are not as popular as the previous ones but we can find them in some of the main world brokers in the sector.

These are contracts similar to those of the classic options but are usually calculated and offered by the broker in a particular way, without necessarily having to follow the options offered in the CBOE.

Of the options (worth the redundancy) of the types of CFDs, to me it is the least I like.

Difference between futures and CFDs

If you have read the guide so far, you will understand quite well what a CFD consists of and what differentiates it from other markets such as financial options or futures is the fact that these are contracts not negotiated in centralized markets.

Futures, on the other hand, are not OTC, and are traded and settled in regulated derivatives markets.

This is the fundamental difference between these two instruments.

It is a huge difference because the fact of being a centralized market gives us a guarantee that our operations do not have the slightest conflict of interest with the broker. While in CFDs that possibility exists.

However, I think we should look more at other differences in determining whether one market suits us more than the other.

The other detail that I have also mentioned quite a lot is the size of the contracts; true weak point of futures contracts for retail trading.

Let’s see the characteristics of futures:

  • Centralized markets
  • They have lower commissions in general (spread + commissions)
  • The price is the same for all participants around the world (fundamental characteristic of the centralized market)
  • Possibility of great intraday leverage, but much less in trading when the operation lasts more than one session
  • Large size of contracts. Typical size: $ 100,000

Characteristics of CFDs

  • Non-centralized markets (OTC)
  • They have slightly higher commissions than futures (spread + commissions)
  • The price is not the same for all participants (depends on the broker and is not the same as the asset to which they follow)
  • Possibility of reduced intraday leverage in Europe but large in the rest of the world. Leverage remains the same for operations of more than one session
  • Contract size reduced. Typical size: 1,000 dollars

As we see in all these points there is one asset better than the other.

Everything will depend on what we want to do and on our situation.

The most important point, as I said, is the last one: the size.

If we have an account of a few thousand euros or dollars we must stay away from the future.

To make efficient trading you have to use a good risk management to the letter.

In futures that is impossible if we do not have a large account: 50, 100, 200 thousand euros or dollars, and so on.

A novice trader may not understand this but it is of crucial importance.

The issue of leverage also has its importance as this is one of the weapons that futures brokers use today to attract more inexperienced clients.

The attraction is perfect: professional markets (truth) with low margins (true).

What happens is that as much as that is true trying to make futures trading with small accounts is a sure recipe for disaster.

Yes, there are brokers that let you operate the future of the SP500 (nominal of about $ 130,000) with a margin of $ 1,000 or less.

Some inexperienced traders are thrilled to see that and think that it will be a piece of cake to be able to dominate this market.

The reality is that in almost all cases these accounts do not take many days before going to zero.

The leverage of the CFDs, on the other hand, makes the trading of these in intraday less risky. This, together with the small size of the contracts, allows traders to operate in a more relaxed manner.

According to my criteria, we should leave the futures for when we can already operate in a professional manner in any of the types of trading. While we cannot do it, it is better to try with less powerful instruments such as CFDs

What are you desperate to do day trading futures and you have an account 5,000 euros?

My advice: keep them in your pocket and start trading virtual without money to see if your strategy is capable of winning after 6 months of trading.

Or in any case you can open an account to do day trading of currencies, for which you will only need 100 dollars or less, since to negotiate the CFD of the EURUSD in a good broker you will need one 33 dollars to move 1,000 units. And the intraday conditions that are offered in forex today do not have much to envy to those of futures contracts.

If you are a trader with little experience you will end up losing almost certainly, but in that case you will only have flown 100 dollars and not 5,000.

Leave the futures for professional traders or for when your account and your experience are big enough.

CFD trading platform

metatrader 4 cfds

For the trading of CFDs we are going to need a platform, either from PC, mobile or through the browser.

Obviously PC and mobile phones are the most popular.

Although from my point of view there is nothing like a PC platform to get all the performance to these markets.

The platforms vary from broker to broker, although there is an indisputable platform in the markets that dominates the others with difference: the Metatrader 4.

This is known as the most popular Forex platform in the world, but as I explained earlier on the issue of currency CFDs, technically most of the currency trading for retailers in the world is CFD, so we can say also that this platform is the most popular in trading contracts for difference.

Curiously, the second best known in the world is possibly the Metatrader 5, from the same company.

Although the latter is more indicated for the trading of stock CFDs, an instrument that the Metatrader 4 does not use (the 5 does allow trading of all instruments).

Then we would have some platform like the cTrader.

However, after the Metatrader, the most used platforms in the market for this type of trading are those of each broker, which in most cases are usually browser type.

Some of the best known are those of Plus500, IG Markets or CMC Markets, some of the largest CFD brokers in the world.

The choice of one or another platform will depend, then, on the broker that we are going to choose and the type of trading that we want to do, since some brokers offer better conditions for what type of trading.

How to operate with CFDs?

CFDs can be operated in several ways.

We can go long (bullish) or short (bearish), but when choosing a negotiation style we have two main options, within which there are infinite strategies.

These two options are:

  • Day trading
  • Swing trading (trading that lasts more than one day)

Why do not I include investing in CFDs?

Because, according to my point of view, CFDs are not instruments to invest but to speculate or trade.

The investment term should be reserved for cash trading and when we buy the securities to keep them for years in the portfolio.

In the trading of contracts for difference we can get to do something similar, but we should not call it investing since at most it would be to carry out speculative operations in the medium term or in cases of hedging if we have a portfolio of shares.

The speculative operations in the medium term could include some that last more than a year, although this would not be normal.

The problem of holding positions for so long is that CFDs have a high financing cost that can be quietly between 8 and 9% per year.

I’m going to put an example:

Imagine you have $ 2,000 and buy Apple CFDs worth $ 6,000.

If one year passes and you hold the position you will have paid the swap corresponding to that period.

If we assume that it is 8.5% per year, we would have to disburse 510 dollars; that is nothing less than the order of 25% of our account.

Imagine that Apple has had a bad year and has not moved the price, because first went up and then went down.

In that case we would have lost 25% of the account just for the cost of the swap.

Do you understand why CFDs are not suitable for investment?

Apple would have to raise 8.5% annually to avoid losing this operation (in this sense we see that this works similar to the financial options on shares).

Therefore, CFDs are not suitable for holding positions for a long time.

However, they are adequate to maintain positions for a moderate time.

CFDs Day trading?

As an experienced trader I can tell you that day trading is an overvalued and popular style of trading for the chances of success that you have, which are extremely low.

However, as I explained in the section where I compared futures with CFDs, the risk of doing day trading of CFDs is much lower than doing it in futures, especially in currency pairs.

Of course, I do not recommend day trading of CFDs for other assets such as stocks, commodities or cryptocurrencies, which have unsuitable spreads.

The indices, according to the broker and the asset could be tried, as there are brokers that offer good conditions in some of the indices.

The best assets for this in CFDs are the currency pairs.

Swing trading in CFDs?

Swing trading involves making operations that last from more than one day to weeks, sometimes even several months.

Unlike with day trading, CFDs swing trading allows us to operate efficiently in almost all financial assets, whether stocks, indices, currencies, cryptocurrencies or commodities.

In my opinion, this is the style that most suits the vast majority of traders who want to become proficient, whether it is for CFDs or for any other market.

If you remember the example of CFD that I put at the beginning of the guide with the CFD of Santander shares, you will see that you can get big profits in a few days by swing trading.

Of course, it is the most appropriate type of trading to operate many markets like stocks.

In spite of this, it has its risks and it is also not advisable to start operating forcefully for those who have no experience.

In order to operate correctly in this style, the most stringent criteria of capital management and diversification of the trading portfolio must be applied; something that novice traders should study thoroughly.

Conclusion

what are cfds

As you can see, the world of CFD trading is quite broad and has many ramifications.

Like all trading derivative markets (with leverage) is a very complicated activity.

Those who think they are bad instruments to operate are wrong.

As I said before, the number of losers in the markets of financial options, futures or warrants is not lower.

The problem is not so much the product itself but the poor financial education and lack of experience.

The first can be acquired more or less with effort and in not much time, but the second is another question.

Because of that experience issue is why I give a vote in favour to the CFD markets. Because in them you can get to acquire a great experience in trading without having to face the great risks of other more professional markets.

With this I return to the subject of futures.

Yes, these last ones are more professional and better markets, but to acquire experience for particular traders they are nefarious.

If you are a person who can easily save $ 100,000, then yes, futures is the way, but if you are a person who earns a normal salary and wants to learn how to trade, CFDs are suitable instruments. Of course, used with moderation and intelligence. And that in 90% of cases means not doing it in day trading mode.

Greetings.