TRADING CFDs
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Is It Possible To Profit, Even When Asset Prices Drop?

Trading on stocks, commodities, and foreign currencies is always a risky endeavor, and investors generally watch the markets very closely to follow their investments. Of course, for individual investors specifically, and for a national economy in general, when asset prices are up, people are happy, and when they are down, people worry.

However, within the ever-growing field of online trading it is possible for investors to make a profit, even when asset prices drop. By investing in CFDs, or Contracts for Difference, a trader who believes that an asset price will drop, can essentially “sell” units of the asset, in order to “buy” back the units at a lower price.

What are the advantages of CFDs over traditional assets?
  • A trader who purchases CFDs does not own actual units of the asset. So, if the price tanks, the trader is not stuck holding onto worthless stocks or currencies
  • Unlike with most tradeable assets, investors can open a “short”: position, in which they “sell” virtual units of the asset they wish to trade. If the price drops, the trader can then “buy” the asset back, potentially making a profit
  • Online brokerages provide leverage for traders, which can be seen as a loan measured in ratios based on the amount of the investment. If the leverage offered on a forex CFD is 20:1, then a $1,000 investment would act like a $20,000 investment, and the potential profit would be 20 times higher than without leverage. (Please invest cautiously – the potential loss is also 20 times higher)
  • Many brokers limit the number of assets on which traders can open short positions, as opposed to CFD brokers, who allow short positions on all of their assets at all times

Any financial investment requires patience, and an understanding of specific assets and of trading markets in general in order to be profitable. Fortrade is proud of the educational academy that it offers its users, and encourages all traders to make full use of the ebooks, webinars and trading videos provided within the website.

Risk Warning and Disclaimer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money 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. Be Aware: You can lose all,
but not more than the balance of your Trading Account. These products may not be suitable for all clients therefore ensure you understand the risks and seek
independent advice. This material does not constitute an offer of, or solicitation for, a transaction in any financial instrument. Fortrade accepts no responsibility
for any use that may be made of the information and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of
this information, consequently any person acting on it does so entirely at their own risk.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country
or jurisdiction where such distribution or use would be contrary to local law or regulation.
When performing transactions in the OTC Forex market, the possibility of making a profit is inextricably linked with the risk of losses. Conducting transactions
can lead to the loss of part or all of the initial investment. Before commencing operations, make sure you understand the risks involved and have sufficient skills to invest.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country
or jurisdiction where such distribution or use would be contrary to local law or regulation.
CFDs and margin FX are leveraged products that carry a high level of risk to your capital. You should only trade with money you can afford to lose. Be Aware: You can lose all, but not more than the balance of your Trading Account. You do not own, or have any rights to, the underlying assets. Past performance is no guarantee of future performance. This information is intended to be general in nature and is not financial product advice. Any advice contained on this website or provided to you by Fort Securities Australia Pty Ltd is general advice only and has been prepared without considering your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. We encourage you to obtain independent financial advice and consider our Financial Services Guide (FSG) and Product Disclosure Statement (PDS) before deciding to enter into or obtain any financial products issued by us.

The information on this site is not directed at residents of the United States or Belgium and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

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