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How to Do CFD Trading? Discover the Benefits

Jun 07, 2025

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This article examines the function of CFD trading along with its primary advantages and benefits to certain traders while determining its suitability for your trading strategy.

CFDs stand as a popular financial instrument among traders seeking market exposure. What do CFDs represent and how can they present advantages for certain traders compared to conventional trading methods?

By the final section of this article readers will understand both the reasons CFDs have revolutionized trading and why BlueSuisse stands out as the optimal broker for entering this vibrant market.

What Is the Purpose of CFD Trading?

The purpose of CFD trading is to enable investors to place bets on price movements of different financial instruments without having to actually possess those assets.

The intrinsic value of CFDs is determined by shares as well as indices and other financial instruments including commodities, currencies and bonds.

When you trade CFDs you're making a bet that will determine if the asset's market price will increase or decrease during a specified timeframe.

CFD trading aims to generate profits from market price movements instead of acquiring ownership in the actual securities. Traders achieve market exposure to assets that would be otherwise too costly or complicated to access directly.

The purchase of a single Amazon stock share is economically unfeasible for numerous individual traders. CFDs allow traders to take advantage of Amazon stock price movements without owning the stock itself.

CFD vs traditional trading reveals that CFDs provide traders with flexible global market access across multiple asset categories via one trading account. BlueSuisse clients have access to CFD trading across more than 130 worldwide markets including 80+ currency pairs and 25+ commodities along with 20+ stocks and 15+ indices.

Investors would find it challenging to obtain this degree of diversification using traditional investment methods alone.

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Who Should Consider CFD Trading?

CFD trading suits only specific traders who have particular goals and risk levels in mind.

The following primary groups should evaluate whether CFD trading meets their needs:

  • Day traders: CFDs provide traders with the capability to leverage both long and short positions which makes them ideal for profiting from short-term market movements.
  • Position traders: Investors who maintain positions over weeks or months can take advantage of CFDs because they allow trading in both upward and downward market trends.
  • Portfolio diversifiers: CFDs enable traders to access different asset classes which serve as a balancing element for their existing long-term investments.
  • Scalpers: Day traders who work to accumulate small gains appreciate how CFDs provide low transaction fees and advantages of CFD trading such as trade CFDs without leverage for rapid trades.
  • Investors on a budget: CFDs enable traders to access worldwide markets using minimal capital investment.

CFDs serve active traders who aim for quick profits but do not suit long-term investors who prefer buy-and-hold strategies. Their versatility allows them to become an excellent option for those who fit this profile.

For beginners, learning how to trade CFDs for beginners is facilitated by platforms that offer demo accounts and educational support, making the best CFD platform for beginners an important consideration.

Key Advantages of CFD Trading Over Traditional Trading

After understanding who should trade CFDs and the nature of CFD and day trading, we should now evaluate their principal advantages relative to traditional trading systems.

  • Leverage: A primary characteristic of CFDs is their capacity to enable investors to utilize leverage on their capital. At BlueSuisse, traders can open positions sizes of up to 1:30, vastly amplifying the potential impact of your analysis. Leverage increases risk exposure yet makes it easier to trade larger market positions.
  • Hedging opportunities: Through CFDs you gain the ability to purchase (go long) and sell (go short) on underlying assets which allows investors to benefit from market declines. Such flexibility becomes essential when protecting your overall investment portfolio.
  • Lower costs: The transaction fees associated with CFDs are generally much lower than those of traditional options and futures. Active traders benefit from avoiding broker commission charges for each transaction because these costs accumulate significantly over time.
  • Margined trading: When trading with CFDs you need only deposit the margin requirement instead of paying for the entire value of the asset upfront. By using this approach, you can manage larger position sizes without needing to deplete your working capital.
  • Tax benefits: Some regions provide tax advantages for profits earned from CFDs compared to traditional investment options. Always review the tax regulations that affect your particular circumstances.
  • Access to illiquid assets: CFDs enable traders to access various asset classes from commodities to niche stock indices which would otherwise be difficult to trade directly. This diversification is a big advantage.
  • Short selling permitted: The rules governing CFD trading permit short selling for specific assets which increases profit potential beyond traditional long-only investments.

The primary advantages that CFDs offer have made them very attractive for traders around the world. The market saw tremendous growth because their unique value proposition stood out.

What Are the Main Benefits of CFD Trading?

The principal benefits offered by CFD trading include leverage opportunities and hedging capabilities.

  • Leverage: By applying leverage strategically traders can strengthen the effectiveness of their market analysis in trading operations. Carefully manage risk.
  • Hedging: Protect your investments by taking opposite positions in different assets through long and short trades.
  • Lower costs: Clients can execute trades without having to pay expensive broker commissions and transaction fees.
  • Margined access: Keep large position sizes under control by comparing them to your account balance.
  • Tax benefits: Investment returns from trading might benefit from lower tax rates compared to traditional investment vehicles.
  • Broader diversification: Invest in international markets by trading stocks, forex, indices and commodities.
  • Short selling: Make money when prices drop by short selling approved assets.
  • Liquid markets: Take advantage of narrow spreads and uninterrupted liquidity in major markets.

The core value drivers of CFDs have drawn a large number of traders over the past few years.

The possibility to take both long and short positions gives investors an unparalleled advantage that traditional investments do not offer.

Is CFD Trading a Form of Day Trading?

CFDs serve both day trading strategies through their low latency and high leverage features but their application extends beyond short-term speculation.

CFD traders often choose to maintain their positions for durations that extend from several days to multiple weeks based on their individual trading approaches and market analysis.

Day trading CFDs requires traders to capitalize on rapid price changes that occur within a single trading day. Market traders use technical analysis and news-based triggers to swiftly enter and exit positions with every minute market fluctuation.

Achieving success in trading requires traders to master market experience, disciplined strategies, and effective risk management.

Swing trading or position trading on intraweek or interweek charts using CFDs provides traders with enhanced flexibility. Positions held by traders can extend for multiple days or weeks while they track longer-term market trends. Broader macro perspectives and fundamental analysis take on increased significance.

CFD trading does not have an exclusive correct timeframe since different traders require different approaches. Your trading timeframe decision should be based on your strategic approach and your comfort level with risk and active management involvement.

Some traders excel at day trading while others choose position trading for its relaxed approach. Your trading goals and preferences determine which timeframes you choose.

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Can You Trade CFDs Without Leverage?

CFD trading involves leverage but you can choose not to use it which makes for a conservative trading strategy. BlueSuisse allows traders to access CFD positions without utilizing leverage.

By choosing the leverage level of 1:1 when opening an order, you are effectively trading CFDs with your own cash funds rather than employing margin.

This approach eliminates both the leverage-induced amplification and the risk of increased losses.

In leverage-free CFD trading each contract functions like a traditional stock because the amount of capital invested matches the position size. Price movement results generate profits and losses each equal to one dollar invested.

This financial model attracts traders because it requires minimal risk management supervision. Trading CFDs without leverage reduces one essential advantage because it limits potential investment exposure for each capital unit.

BlueSuisse exists to serve as your perfect CFD Broker provider. Our regulated platform delivers profound liquidity paired with advanced technology while providing tight spreads and bespoke service through decades of accumulated expertise.

The platform delivers actionable trading ideas alongside strong risk management tools and educational content to help traders refine their strategies over time.

BlueSuisse ensures secure and quick processing of customer funding and withdrawal transactions.

Sign up for a live account to personally try BlueSuisse’s award-winning trading platform. Discover our dedication to becoming the leading trusted name in worldwide online CFD trading through a firsthand experience.

How to Do CFD Trading? Discover the Benefits | BlueSuisse