If you search for “XFR Financial Ltd” on Google, you will not find any link to the official website of the company. This is because Google does not know that XFR is actually the company that owns http://xtrade.com, the broker endorsed by Cristiano Ronaldo, the Portuguese soccer player who plays for Real Madrid.
If you have any experience trading online, then we really do not need to tell you anything about it, but if you are new, you do not need to worry because in this article, we are going to tell you everything there is to know about it.
XFR Financial Ltd is one of the brokers that allows you to trade the financial markets. Unlike other brokers, however, it is unique in offering Contracts for Difference or CFDs. What are CFDs? It is a derivative asset that allows a trader to take a position on the future price of an asset. It is a lot like binary options trading in that it is a derivative instrument, meaning that the trader does not hold any of the underlying asset being speculated on (for example, you do not own any dollars if you trade USD/EUR options or CFDs). You are merely speculating on the price and earning money if your hunches prove you right.
Difference Between Binary Options And CFD
However, unlike binary options, your earnings are settled based on the difference between the price in the contract and the price that the underlying asset closes at. However, before you even think that you could be a millionaire overnight just by trading CFDs, you should know the spreads are fixed in CFDs and the pips are too. So, you can only profit within a certain range, otherwise the broker will go bankrupt. With XFR Financial Ltd, the forex CFDs are fixed at 2 to 5 pips depending on the currency pair being traded.
Should you trade CFDs?
Well, that really depends on several factors. One of these factors is your risk appetite. Can you handle losses? Remember that in trading the financial markets, there are no guaranteed returns, and you could earn a lot of money one time and lose a lot of money the next. It happens all the time. However, the best traders have found a way to increase their odds of winning by 80%. They did so by studying the underlying instrument (gold, for example) and determine which factors affect the price movements.
After that they studied price charts with different indicators activated to determine if price trends. Then they traded on their demo accounts while keeping a trading journal at XFR Financial Ltd detailing all the factors that were considered in making a trading decision.
Takeaway
If you want to try CFD trading or any other type of trading for that matter, it is very important that you follow the path of the expert traders. Formulate a winning strategy first in your demo account before trading with real money. But even when you trade with real money, you should only do so with money you can afford to lose.
