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If you are looking for reviews on XFR Financial Ltd, you are actually looking for information on the company to see if there are any indications that it is a scam. In this article, we are going to tell you more about it and write a fair review so you can decide if you should sign up with it or not.
Security And Trust Above All
If you search for XFR Financial Ltd on the internet, the first web page at the top of the search engine results is a web page on the Cyprus securities and exchange commission website. This is a good thing because it tells you that the company is legitimate and that it is regulated. This is not something that you can say about the majority of all the other brokers out there. Being regulated means that your money is kept safe by a fiduciary third party.
If you’ve dealt with brokers before, then you already know just how much safer you feel just by dealing with a regulated broker. With non-regulated brokers, they tend to find reasons not to give you the money when you submit a request for withdrawal.
So, now that you know a little bit more about XFR, you might be wondering about its trading platform. You will find it on the website xtrade.com. If you head over there, you will see that the company is different from other brokers in that it does not trade directly in the finance markets. In other words, you cannot buy actual currencies or commodities like gold directly. Instead, what it offers is a derivative trading instrument that derives its profitability (or non-profitability) from the price movements of the underlying instrument.
This derivative trading instrument is what you call a CFD or Contracts for Differences. A CFD is a contract that a trader agrees to with the broker that makes it appear as if the trader is buying the underlying instrument.
How CFD Trading Works
Here’s a very good example of a CFD at work. You decide you want to buy shares of Google. Instead of buying 1,000 Google stocks from a stockbroker, you buy 1,000 CFDs from XFR Financial Ltd trading platform. If Google’s share price falls $4 per share, you lose $4,000 but if it increases by $4 per share, you gain $4,000 in profit. It’s as if you bought actual shares of Google and are losing and winning depending on how the price moved.
The difference between a CFD and a stock is that you can buy CFDs on leverage, meaning that even if you only funded your account with $250, you can still buy $4,000 worth of CFDs through the leverage extended by the broker. But leverage is really a double-edged sword, and while you could win a lot, you could also lose a lot.
No matter what type of CFD you would like to trade with XFR Financial Ltd, whether it’s for a currency pair like USD/EUR or a commodity like gold, the important thing to remember is that you need to develop your skills at identifying real price trends.