Beginner
What a CFD gives you and what it does not
A CFD turns a price change into a contractual cash result. Understanding what you own, and who owes that result, comes before choosing a market.
Read articleFOLITIC / CFDS TRADING GUIDE
CFDs Trading Guide
Understand CFDs, interpret quotes and measure the effects of leverage, costs and execution. Follow ten stages from contract basics to strategy testing, portfolio hedging and a disciplined trading process.
Start with What a CFD gives you and what it does not, then follow the next lesson links. Explore 40 lessons with worked examples, exercises and further reading.
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CFD Foundations
Understand price exposure, contract obligations and how CFDs differ from owning an asset.
Beginner
Long and short CFD positions explained
Buying and selling a CFD reverse the direction of exposure. Work from actual opening and closing prices to avoid confusing a falling market with a losing...
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Beginner
CFDs compared with shares futures and options
The same market view can be expressed through very different instruments. Compare rights, cash demands and holding costs before comparing leverage.
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Beginner
Reading a CFD contract specification
A familiar market name does not guarantee familiar contract economics. Read the specification before trusting the quantity shown on a trading ticket.
Read articleQuotes Costs and Cash Flows
Read executable prices and account for commissions, funding and corporate actions.
Beginner
Bid ask spreads and the real entry price
A chart price is not necessarily a price you can trade. Bid and ask quotes explain why a new CFD position can begin with a small...
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Beginner
Commissions conversion fees and total trade cost
The advertised spread is only one line in a trading budget. Reconcile every cash entry to understand what a successful price move actually earned.
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Beginner
Overnight funding and the cost of holding
A cash CFD can become expensive even when its market price barely moves. Funding links the holding period to the full economic exposure.
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Beginner
Dividends splits and cash adjustments
Corporate actions can change a CFD price and its cash ledger at the same time. Read both entries before deciding whether value was created or lost.
Read articleMargin Leverage and Position Sizing
Separate required margin from trade risk and prepare for adverse price moves.
Intermediate
Notional exposure and effective leverage
Leverage describes the relationship between exposure and equity. It does not tell you whether a trade has a good reason to exist.
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Intermediate
Position sizing from risk rather than margin
Required margin answers whether an order can be opened. Position sizing should answer whether the planned loss and a worse outcome are tolerable.
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Intermediate
Margin close out and account equity
A margin close out is an account survival mechanism, not a carefully chosen trading exit. Understand its trigger before several positions share the same equity.
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Intermediate
Stops gaps and realistic loss limits
A stop instruction and a guaranteed exit are different promises. Model what happens when the market jumps past the price you planned to use.
Read articleMarkets and Contract Structures
Compare share, index, currency and commodity CFDs using their actual specifications.
Intermediate
Share CFDs and short selling constraints
A share CFD follows a company price while adding a separate contract and financing relationship. Short positions introduce constraints that a simple chart cannot show.
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Intermediate
Cash index CFDs and futures based CFDs
Two CFDs referencing the same stock index can have different prices and cash flows. Identify whether the quote represents a cash level or a dated futures...
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Intermediate
Currency CFDs pip values and account currency
Currency pairs contain two currencies, while your account can use a third. Follow each unit through the calculation before comparing profits or risk.
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Intermediate
Commodity CFDs roll adjustments and price curves
A commodity CFD may follow a physical reference, a dated future or a provider constructed continuous price. Those choices change how holding returns behave.
Read articleAnalysis and Trade Preparation
Connect market context, price structure and scheduled events with a testable trade idea.
Intermediate
Building a trade thesis before opening a CFD
A trade thesis is a claim that can be tested and rejected. Write it before looking at the maximum size available on the order ticket.
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Intermediate
Trend structure support and resistance
Price structure helps describe what the market has done. It becomes useful for trading only when its definitions and failure conditions are explicit.
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Intermediate
Economic releases earnings and event risk
A scheduled announcement changes the distribution of possible prices. Planning for the event is more useful than assuming a good headline guarantees a good trade.
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Intermediate
Volatility liquidity and choosing a session
Volatility measures movement while liquidity describes the ability to transact. They interact, but neither can replace the other in a CFD execution plan.
Read articleTrading Strategies
Evaluate trend, breakout, range and relative value approaches without assuming an edge.
Advanced
Testing a trend following CFD strategy
Trend following seeks to participate in sustained movement while accepting that many entries fail. A CFD adds costs that must be tested alongside the signal.
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Advanced
Breakout trades and false signals
A breakout is a hypothesis that trading outside a range will attract continuation. Many breaks reverse, so the definition of failure matters as much as the...
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Advanced
Range trading and the cost of being wrong
Range trading assumes a price relationship will continue to contain movement. The largest risk often arrives when that assumption stops being true.
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Advanced
Pairs trading and residual market exposure
A long position in one company and a short position in another can reduce some shared exposure. It does not automatically create a market neutral or...
Read articleHedging and Portfolio Applications
Measure the benefits, costs and remaining exposures of temporary CFD hedges.
Advanced
Temporarily hedging a shareholding with a CFD
A temporary short CFD can offset some price movement in an existing shareholding. It also creates a separate account that must survive its own cash demands.
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Advanced
Index hedges and portfolio beta
An index hedge targets shared market exposure rather than every company risk. Beta provides an estimate of sensitivity, not a promise of precise protection.
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Advanced
Cross asset hedges and basis risk
A related market can move differently at exactly the wrong moment. Basis risk is the part of an exposure that a convenient hedge does not reliably...
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Advanced
Why a CFD hedge is not passive income
A hedge exchanges some market exposure for costs and operational demands. It should be evaluated as risk management, not marketed as a stream of effortless income.
Read articleProviders Execution and Protection
Check the contracting entity, order rules, client protections and operational risks.
Advanced
Checking the legal entity and client protections
The provider brand is not the legal counterparty. Client protections depend on the entity, location and classification named in the agreement.
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Advanced
Provider pricing conflicts and counterparty risk
A CFD combines market exposure with a claim on a provider. Pricing policy and counterparty strength remain relevant even when the underlying market is liquid.
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Advanced
Market limit and stop orders in practice
Order types trade one uncertainty for another. Choosing the right instruction requires understanding both the trigger and what can happen after it.
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Advanced
Execution records outages and disputed fills
A clean execution record makes platform problems easier to diagnose. Reconstruct what was requested, what was available and what actually happened.
Read articleResearch and Performance Testing
Test ideas with realistic quotes, costs, uncertainty and independent evaluation.
Advanced
Building a CFD dataset that can be tested
A CFD backtest needs more than a continuous price chart. The dataset must reflect the contract, quote sides and cash entries that a trader could actually...
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Advanced
Backtesting after spreads funding and slippage
A price signal becomes a trading result only after execution and costs. Build those mechanics into the test instead of deducting an arbitrary fee at the...
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Advanced
Avoiding overfitting and testing on unseen data
A rule can fit old data beautifully and fail immediately afterward. Independent testing helps separate a repeatable idea from a lucky selection.
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Advanced
Expectancy drawdowns and uncertainty
Winning frequency is only one part of performance. The size of gains, losses, drawdowns and estimation uncertainty determines what the record actually says.
Read articleTrading Plans and Discipline
Build risk limits, review execution and decide when to reduce exposure or stop trading.
Advanced
Managing correlated positions and portfolio limits
Several small positions can behave like one large trade. Portfolio limits should capture shared drivers rather than count how many symbols are open.
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Advanced
A CFD trade journal that improves decisions
A journal should explain a decision well enough that you can review it without remembering how you felt. Record the process and the outcome separately.
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Advanced
Loss limits trading pauses and recovery
A trading pause is a planned response to risk or deteriorating execution. It should not depend on waiting until emotions or account losses become unmanageable.
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Advanced
Building your CFD trading and risk plan
A complete plan connects market reasoning with contract mechanics, execution and review. It should also explain when no CFD trade is justified.
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