How to Trade Stock CFDs?

Ready to take your trading to the next level? Trading stocks offers you the opportunity to capitalize on market movements of top stocks like Tesla and NVIDIA without the need to own the actual shares. 

Enjoy the benefits of tight spreads, bonus promotions, and VIP market research maximize your potential at zForex!

Getting Started with Trading Stocks

To get started with trading CFDs, you'll need to open a trading account with a reliable broker like zForex. Begin by completing the registration and verification process, then fund your account with the required minimum deposit.

Here are some requirements before starting:

1- Setting Up Your Trading Account

Since you're going to need a trading account to trade these leveraged products, let's take a look at how you can set up your account on zForex and start trading easily:

1. Create your account from the sign-up page,
2. Fill out the form and submit it,
3. Verify your email address, and check for the login details.

2- Learning the Fundamentals of Stocks

CFD trading involves speculating on the price movements of financial instruments without owning the underlying assets. This means you can profit from both rising and falling markets by buying (going long) or selling (going short) the contracts.

To get profits from your trades, you need to understand how different scenarios can affect the markets and take positions regarding the actions.

Stock Investment vs CFD Trading

In traditional stock investment, you buy shares and hold ownership, benefiting from dividends and long-term value appreciation.

In contrast, CFD trading allows you to speculate on price movements without owning the shares, providing greater flexibility and lower capital requirements.

Basic Terms You Need to Know

It would be better to take a look at some basic terms and definitions before placing some trades.

• Platform: The software used for trading, providing access to market data, analysis tools, and trade execution.
• Leverage: This allows you to control a larger position with a smaller amount of capital, amplifying potential profits and losses.
• Spread: The difference between the buying (ask) price and the selling (bid) price of a stock.
• Long or Short: Positions taken in the market; going long means buying with the expectation of a price increase, while going short means selling with the expectation of a price decrease.
• Volume: The amount of an asset being traded, often used to gauge market activity and liquidity.

Before diving into trading, it is crucial to have a thorough understanding of market mechanics, strategies, and risk management. This knowledge can increase your chances of success. At zForex, we provide comprehensive educational resources and support to help you build a strong foundation for your trading journey.

3- Executing Trades with Real Examples

To understand how to trade effectively, let's look at some real-life examples of executing trades.

Long Position Example

First, consider trading NVIDIA Stock CFD (NVIDIAUS). Start by selecting NVIDIAUS from the zForex trading platform. You decide to use your $2000 budget to buy NVIDIAUS at $500 with a leverage of 1:20. This gives you control over $40,000 worth of NVIDIA stock. The price rises to $505 due to the release of a highly anticipated new product. You then close the position at $505, resulting in a $400 profit.

Short Position Example

Let's take Tesla Stock CFD (TSLAUS) as an example. You have a $3,000 budget and decide to sell TSLAUS at $700 with a leverage of 1:50, giving you control over $150,000 worth of Tesla stock.

Negative news emerges about a significant tax debt for Tesla, causing the price to drop to $697. You close the position at $697, resulting in a profit. Initially, you controlled 214.29 shares. When you close the position, the value of the shares is $149,642.13. Your profit is $357.87.

The Bottom Line

CFD products are flexible and an easier way to speculate on the price movements of real stocks. By joining zForex, you can take advantage of competitive spreads, 1-on-1 support, and a user-friendly platform.

Open an account now and experience the benefits of trading with a reliable and innovative broker.