CFD Trading Vs Options Trading - Which Field is Better & Why?

One of the most flexible trading markets in the world today, Contracts for Difference (CFD) is a domain ready to disrupt the trading society. What makes CFD trading unique and so sought after is that firstly, you don't have to own an asset to trade it, you merely speculate on the change in its value, and secondly, you can do this for currencies, options, indices, stocks and a variety of such financial commodities! 

There are rewards in plenty, and risks plenty more, which is what makes trading any asset, be it stocks, currencies or contracts, a very risky endeavor.
 

What is CFD Trading?
 

Choose the Best Among CFD Trading vs Options Trading

 

Put simply, contracts trading are the exchange of a financial commodity between a broker and a trader did across a pre-established timeframe decided by the opening and closing time of a trade. In essence, a CFD is an agreement between the broker and the trader, one that requires no actual owning of said asset. Any profit or loss made is a result of the commodity's movement.
 

This nature of CFD, which lets you profit from simply speculating is one of its biggest advantages. Let's see an example of its beneficial nature - assume that you want to buy 20 shares of an asset valued at $10 per share, doing this on stock trading grounds would lead to you purchasing the 20 shares for $200. However, with a CFD agreement, you need only pay a percentage of the actual share value. 

So with 5% charged, you will only be paying $0.5 per share and be able to buy the 20 shares at just $10! This is one of the many benefits surrounding CFDs.
 

Why Trade CFDs?
 

Trade on Falling and Rising Markets: The biggest advantage CFD online trading in Malaysia has, is that it allows traders to profit from markets that are rising as well as the ones that are falling. This means that you are immune to erratic economic shifts that disrupt growing trends and push them downwards. So long as you analyze the markets properly, falling trades will be a friend just like the ones going up are.
Flexible Contracts: There is no trading cap you are supposed to obey. As a CFD trader, the contracts are flexible and lot sizes are provided in varying sizes. 

If you are new, you can begin with smaller lots; as you progress the size can be incremented and you can start making bigger trades.
 

Hedge Trades: Hedging can help you greatly when you place risky trades and are on the verge of losing a big chunk of your capital. Since CFD trading in Malaysia can be done both ways, you can hedge your losing trades by opening another position in the opposite direction! This guarantees that either one of the trades will win or the one that's lost will be compensated for by the other. 
 

Trade on Margin: Margin trading makes CFDs so very lucrative! To put margins simply, opening a trade contract for a particular asset will only cost you a margin of the original value said asset carries. This makes CFD trading lighter on the pocket but doesn't reduce its profitability! 
 

What is Options Trading?
 

A derivative security, options get their value from parent assets. Options trading are the buying or selling of an asset for a fixed price before a specified date and this is done through an options contract. Options are of two types, call (buy) and put (sell) options. A call option lets you buy an asset at the price agreed upon, and a put allows you to sell the same. Once either of these options has been bought, your job as an options trader is to go long or short depending on your market speculations.
 

Benefits of Options Trading:
 

Cost-effective: Options trading can be very cost effective when compared to its cousin trading fields. Buying 100 shares of a $50 stock will cost you $5000 through normal means; with an options contract, however, you can purchase two $10 call options, wherein each call represents 50 shares, and the total would only add up to $2000! 
 

Relatively Less Risky: The margin and leverage provisions make options less risky when traded properly; keep in mind that this very leverage can backfire and lead you to losses! As a hedge and on nominal margins, however, options are times less risky than shares.
 

Healthy Profit Opportunities: When the investments are lesser than the returns, it is a clear case of evident profits. Options trading markets have a stellar profit potential in the hands of the right trader.
 

So if you are trying to decide between options trading and CFD trading in Malaysia, it ultimately comes down to preference! Both markets have a good trading value with ample profits for the taking. Still confused? Talk with an expert at WesternFX and know more! We house trading veterans, battle-hardened and ready to help you out with your queries. Call us today to get in touch!

6 Tips to Boost Your Forex Trading Strategies in 2019

The wealthy Forex exchange markets carry a trading value of over $6 trillion today, and thousands of traders are in the race to get their hands on this! Foreign exchange has grown to become a tremendously valuable field, with the competition ever-increasing. What ultimately takes traders to the profits they dream of is the efficiency of the Forex trading strategy they implement in trades. Chaotic, volatile and unpredictable, currency trades can get out of control in an instant. Only when backed by a well-planned approach can you expect to see even the most marginal of profits!
 

There are myriads of opportunities for traders to invest on, but without a good trading strategy, even the easiest of trades will slip out of your grasp. A trading plan is responsible for giving Forex players a clear idea of what is to be done; essentially, it serves as a backbone to traders. Many novices make the mistake of venturing into currency exchange markets without the backing of a solid plan, and needless to say, this seldom ends well.
 

Tips to Improve Your Forex Trading Strategies

Your trading career can see multiplying profits if you work with a meticulous strategy, and here are 6 ways to devise a sharp plan:
 

1) Keep the Starts Small: Before you start Forex trading in Malaysia, make sure your steps aren't so long that you trip over! One of the biggest reasons many traders see loss after loss is because they are aiming too high up. Driven by the desire to make hefty profits right off the bat, Forex traders overinvest, participate in bad trades and hold positions that they will eventually lose. If you want to ensure that your Forex trading career lasts long and brings in good profits, keep your starts small. 

Implement simpler strategies, invest in smaller amounts and let the smaller wins make your content! You can increment the capital you put in gradually, as you start getting more experience. 
 

2) Have Realistic Expectations: Dreaming is one thing, day-dreaming is another. While you are Forex trading in Malaysia, it is natural to want to think about making a lot of money and seeing swift success, but thinking alone doesn't do much. You will have to leave the castle you've built in the sky, come down and put in the ground work! Always keep realistic expectations, they help in two amazing ways - letting you focus on an achievable goal, and keeping your foot on the ground. Forex exchange is definitely an arduous task but in no way impossible. 

The struggles put in will be rewarded grandly! So keep a proper goal, and don't stop working towards it.
 

3) Prioritize Capital Management: How efficiently you manage your investment speaks a lot and will have a great impact on your trades down the line. In the rush of trading, Forex players forget to protect their money with the necessary means and end up losing hard-earned money completely to one bad trade! You will come across these catastrophic trades on many occasions, where the outcome is almost always bad. 

To protect yourself from such trades, you will have to be sharp and take the necessary money management measures and make it an indispensable part of your Forex trading strategies. 

Without enough capital in your trading account, even a small loss will leave you emptied and burnt! 
 

4) Don't Rely on Rumors: Only trust the news and proven statistics. In a market with thousands of traders around, rumors and myths are bound to cloud the way. Don't rely on them. You will misguidedly make wrong calls and end up losing a good chunk of money by taking the wrong turn! Precision and adeptness play an important part while Forex trading in Malaysia. Make judgments based on strong analysis and studies, rather than letting wrong whispers land in your ear. 
 

5) Avoid Getting Overemotional: Losing is natural, and you are not always responsible for it. Agreed that some exchanges could have gone better had you traded right, some trades went bad solely because the markets were erratic! Acknowledge the simple fact that you won't always win, and you will have a fresh perspective of the market.
 

6) Watch the Market Developments Keenly: Forex exchange markets always come up with something new, as an adept trader, you will have to be updated about what goes on. Study more than you trade, it's that simple. Always have an eye on Forex trading developments, be it economic, social or political factors that influence it.
 

Many capable traders have made a name for themselves while Forex trading in Malaysia, but none without a good Forex trading strategy. Be it a simple approach or a complex one, partner up with WesternFX today and back your trades with a solid plan! Our experts have ample experience trading currencies and will equip you with a stellar Forex trading strategy for your exchanges. Call us today and talk with us to know more!

4 Reasons Why Forex Trading is an Amazing Career Option

The same old 9-5 can grow on a person, and before you know it, you're all burnt out. Monotone jobs with little to no excitement can drain out all the fun from a person! Deadlines and the target sound exciting in the beginning, but when you are on the same rollercoaster for years, there are no ups and downs left to imbue your days with fun. This is where Forex trading comes in; a field filled with incredible profit potential and enough volatility to keep you glued, it can be the perfect full-time career option.
 

Many people have taken up Forex trading as a part-time job and this helps make a good extra buck while studying, working a day job or tending to any other work in general! 

Here are 4 reasons why Forex trading is a great path to go down:
 

Forex Trading is an Amazing Career Option

1) No Constrictions: You aren't limited by anything as a Forex trader. Want to work part-time as a trader? You can. Want to diversify trades with different currencies? You can! The arduous 9-5 severely limits what people can do. In the foreign exchange markets, you take the lead and the decisions made are yours alone!
 

2) A Variety of Trading Methods: Forex trading strategies lie in plenty, and you can choose from a number of Forex trading approaches according to your interests. If you want to take a slower approach, you can draft long-term plans and follow a relaxed approach. Similarly, an intensive experience can be obtained through shorter strategies placed! You are free to implement any plan you feel suits you best and make a good winning all the same.
 

3) Work from Anywhere You Want: With online trading available, you can take part in Forex exchange from your home or a beach if you like! Foreign exchange doesn't have the limitation anymore that requires you to visit banks.
 

4) You are Your Own Boss: The greatest freedom you can get is paving the path you walk on. As a Forex trader, you are your boss. Trade when you feel like, play around with Forex trading strategies and implement any and at the end of the day - make a great winning!
 

If you're thinking of switching fields, Forex exchange will be the perfect fit for you! With an arsenal of benefits, you can make a good sum frequently, while also indulging yourself in some interesting market research. Come sign up with WesternFX now, and avail from our array of extensive Forex solutions. Assisted by our experts, you will see stellar profits in no time!