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What are Forex CFDs?

Are you a forex enthusiast? Are you a learner trying to figure out the ins and outs of forex trading? Then, if you’ve researched across the web about Forex trading, you might have seen the term ‘Forex CFDs’ somewhere at some point during your research.

When it comes to forex trading, there are two ways to trade Forex. While one of it is CFDs (Contract for Difference), the other is spot Forex which is also known as margin. Spot Forex is a method that involves buying and selling the actual currency. For instance, a trader purchases a certain amount of Pound Sterling for Euros, and then, as the value of the Pound increases, the trader could then exchange Euros for Pounds again for better profit as you are receiving an increased amount in comparison with your originally spent on the purchase. Whereas, CFD is a contract that represents the movement in the prices of financial instruments. It is a kind of an arrangement made in financial derivatives trading where the differences in the settlement between the open and closing trade prices are cash-settled. In terms of Forex, CFD means that rather than purchasing and selling large amounts of currency, you can profit on price movements without owning the asset itself. Along with Forex, CFDs are also available on indices, bonds, commodities, shares, and cryptocurrencies. In every case, anyone can trade on the price movements of these instruments without having to purchase them.

Risk Warning: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. Trust Capital TC Ltd does not take into account your personal investment objectives or financial situation. Trust Capital TC Ltd makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by an employee of Trust Capital TC Ltd, a third party or otherwise.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Trust Capital TC does not offer Contracts for Difference to residents of certain jurisdictions including the USA, Iran, and North Korea. Please consider our “Risk Disclosure“.

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