CFD trading stands for ‘Contract for Difference’.
CFD traders can trade different assets (stocks, indices, crypto etc.) and capitalize on the fluctuation of their prices.
While that is the central idea, there are a whole bunch of other factors that help it along.
These have the capacity to be exploited and manipulated in order to extort money from the traders.
These shady operations are usually the work of unlicensed and unregulated brokers who lure customers in with false hopes and promises. That said, a fully licensed and regulated broker is the way to go, if you are looking for trustworthy services.
CFD Trading is not scam if you are picking the right broker.
We have tested over 60 brokers. I would recommend you only sign up with regulated and licensed brokers that we recommend. As soon as we think a broker is a scam we list them on our scams page.
Here is our #1 rated broker for CFD Trading (Safe & Regulated):
Plus500 – Best CFD Trading Broker in 2019
This is our top pick for CFD traders. Plus500 is a trustworthy company, with an amazing trading platform.
- Regulated by CYSEC
- Easy Sign Up Process
- $100 Minimum Deposit
We have dug deep to find more information about the license of ForTrade. As you can see here, they are listed on the FCA page (Reference number: 609970).
It is merely a sign of approval from a governmental authority to reinforce its competence and ability to deliver justly on your investment.
For all the reasons stated above, we see no reason why a traders shouldn’t trust this broker.
Best CFD Brokers That Are Not Scam
All of these brokers offer CFD trading in addition to other forms of trading. These brokers are regulated buy a trusted authority, therefore they are considered to be very safe.
|$100||YES||+ CRYPTO TRADING|
|$200||YES||+ ASIC LICENSE|
|$100||YES||+ UK FCA LICENSE|
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
In order to ensure the game you are playing is not rigged against you, you must investigate the industry as deep as you can.
Scams in Stocks Trading
The usual complaints associated with stock trading are the little things like commissions, fees and services. However, the online community is also awash with hundreds upon hundreds of nasty accounts of customers who feel betrayed by their broker and seek to warn others about them. The brokers in question are not exclusive of high repute and global recognition for trustworthy services.
That said, it is just as important to take this stories with a grain of salt since a lot of customers are not particularly articulate about the alleged scam that occurred and may not have fully understood the official terms & conditions involved before lodging their complaints.
Scams in CFD Trading
CFD trading is generally considered to be a relatively riskier form of trade and is not legal in the United States while Forex trading is. The main reason for that is it in the interests of most of the futures and stock trading industries to keep CFD trading out of the competition.
It was certainly not out of compassion for traders to spare them from making a reckless mistake and losing big time on their funds. Without CFD trading in the picture, any lost funds would likely be theirs.
The answer to the question of whether or not CFD trading itself is a scam is a no.
CFD trading is simply a derivative form of trading that allows traders to trade in numerous markets on a global scale using a single account accompanied by its own unique features.
Leverage Can Be Risky
It is on the riskier side of the different trading forms as it carries the option of using leverage. You can leverage your account up to hundreds of times over what it is actually worth, but you will be taking an enormous financial risk there.
The idea is to take calculated and controlled risks so that you have a greater possibility of using this form of trade in an efficient and safer manner without risking too much of a financial downfall.
It is best advised to invest in CFD trades that are under the value of your own account so that you will not be using leverage so it will be less likely in the event of a loss that you would lose more than your initial investment. Using leverage, you stand in a position to win a lot of money as well as lose it and in CFD trading, the final outcome is notoriously difficult to predict until the time the trade expires.
So Is CFD Trading a Scam?
So can these forms of trading be classified as scams? Definitely not. As long as you know how they work and calculate well the risks involved, you can be assured fair play in your online trading activities.