In CFD trading in Singapore, you trade the difference between the current price of an asset and its future price. You don’t own the underlying asset, but rather you speculate on whether the price will go up or down. This makes CFD trading a versatile tool that can be used in various ways.
One way to use CFD trading is to take advantage of price movements. For example, if you think the price of a stock will go up, you can buy a CFD on that stock. If the stock indeed rises in price, you will make a profit on your CFD trade.
Another way to use CFDs is to hedge your positions. For example, let’s say you own stock but are worried that the price might go down. Then, you can buy a CFD on that same stock, which will protect you from any potential losses.
CFDs can also be used to generate income. One way to do this is by buying a CFD on a stock that you think will go down in price. Then, when the stock does fall, you can sell your CFD at a profit.
There are many other ways to use CFDs, so it’s important to do your research and find out how they fit into your trading strategy. If you’re new to CFD trading, it’s a good idea to start by demo trading. This will allow you to test out different strategies without risking real money.