The experts conducted a study to help traders, especially beginners, choose the right assets for trading among various options offered by Forex brokers. They examined successful traders’ CFD trading habits and identified the most profitable asset classes. The research aimed to provide specifications for different asset classes’ CFDs and highlight preferred instruments of successful traders. TU team gathered reliable data to recommend the optimal trading instruments for success.
Traders Union analysts have explored Contract for Difference (CFD) trading, a contractual arrangement between buyers and sellers concerning the difference in asset values from contract inception to expiry. Unlike traditional supply agreements, CFDs do not necessitate asset ownership or delivery rights. Price fluctuations determine profits for buyers and sellers.
Among CFD offerings, experts have identified key categories:
- Index CFDs: Traders widely favor Index CFDs, with US 30, US 500, DAX, Euro Stoxx 50, CAC 40, FTSE 100, and others being the most popular choices. Among them, S&P500 CFD (USA500, SP500, US500) stands out as the top choice. The spread for this instrument ranges from 30 to 50 pips, with an average daily volatility of 0.9-1% for US500 CFD. Based on this information, analysts at TU have deduced that while this asset class presents lower liquidity compared to major currency pairs, its average daily volatility aligns with that of Commodity CFDs.
- Commodity CFDs: These cover assets like gold, silver, oil, agricultural products, etc. The commonly traded Gold CFD (XAU/USD) demonstrates modest volatility and liquidity.
- Cryptocurrency CFDs: Involving major cryptocurrencies such as BTC, ETH, and XRP, BTC/USD is a prominent option. However, it presents higher volatility and lower liquidity than major currency pairs.
- Other CFDs: This category includes Bond, Stock, ETF, and Interest CFDs. Apple CFDs (AAPL) were analyzed, displaying moderate liquidity and elevated volatility.
The analysts have scrutinized these CFD types, considering liquidity, volatility, and spread data.
Advantages and Disadvantages
The experts have highlighted the following features of CFD trading.
- Higher leverage potential.
- Diverse asset classes tradable on a single platform.
- Single EA usability across different assets.
- No asset ownership needed.
However, there are disadvantages:
- Dividends or coupon payments are unavailable in stock or bond CFD trading.
- Reliable Forex broker selection is crucial, as they often handle CFD transactions.
- CFDs lack strict standardization due to off-exchange nature.
- Weaker CFD market regulation compared to the underlying asset market.
Traders Union experts have comprehensively outlined the pros and cons of CFD trading. While CFDs offer valuable trading opportunities, considering ergonomic aspects such as investing in monitors for trading can further enhance the trading experience.
Top Trading Monitors
The ideal trading monitor enhances your market insights by providing access to real-time trading information, patterns, and economic conditions. Selecting the best monitor can significantly elevate your trading prospects for this year. TU analysts have determined the best monitors for trading in 2023:
- Samsung CHG90 Series 49″: Offers remarkable visuals with Quantum Dot (QLED) Technology. Boasting 144Hz and 1 ms attributes for reduced input lag and ghosting, its curved design offers an immersive viewing experience, making it a preferred choice.
- Dell U4320Q: This monitor excels in multitasking, facilitating simultaneous displays from various sources. Its Picture-by-Picture (PBP) function accommodates up to 4 CPUs or laptops, enhancing trader efficiency.
- LG 34WN80C-B UltraWide Monitor: Designed for multitasking, this monitor provides ample space and On-Screen control options for segmenting the screen. It includes built-in speakers, light sensors, and a 4-port USB hub.
- HP X27q 27″ WQHD: Boasting IPS panel technology and a 165 Hz refresh rate, this model prioritizes comfort and precision. It supports vertical portrait mode and incorporates AMD FreeSync Premium to mitigate stuttering.
- ViewSonic 32 Inch 1080p Widescreen: This monitor streamlines multitasking through ViewSplit software, enabling efficient window division. Its premium IPS panel ensures clear chart and graph displays.
While these monitors enhance trading experiences, it’s vital to consider ergonomics and explore the best monitors for trading to further optimize your setup.
The experts have conducted a comprehensive study aimed at aiding traders, particularly beginners, in making informed choices amidst the plethora of asset options offered by Forex brokers. By analyzing the trading habits of successful traders in CFDs, they’ve identified lucrative asset classes and provided specifications to guide traders’ decisions. The exploration of CFD categories, ranging from Index to Commodity and Cryptocurrency CFDs, has enabled experts to highlight the advantages and disadvantages of these trading options. Moreover, the insights extend to the realm of optimal trading monitors, enhancing the trading experience with top monitor recommendations.
Disclaimer: The content of this partner post is provided by Traders Union. The statements, views and opinions expressed in this column are solely those of the content provider and do not necessarily represent those of NewsBTC. NewsBTC does not guarantee the accuracy or timeliness of information available in such content. Do your research and invest at your own risk.