Forex Zone - Forex Forum

Difference between Forex and CFD trading

Discussion started on Forex Education

  • Hero Member
  • Posts: 9575
  • Points: 59
  • Likes Received: 728
  • Reputation: +10/-20
Some aspects that distinguish forex and CFD trading include aspects of the types of products and trading services, factors that affect the trading market, and aspects of the reasons for investors in choosing to trade forex or CFD, which are described below:

1. Trading Products and Services

Forex trading has specifically focused on foreign currency trading (foreign exchange). The forex trading method calculates the difference in 'pairing' of traded forex.
Meanwhile, CFDs present a variety of trading products and services in the form of derivative contracts from several financial instruments such as energy commodities and metals, stocks, indices, equities, and also forex. So, you are free to choose contracts or trading with a variety of currencies and increment value depending on the region of the country where CFD trading assets originate.

2. Factors That Affect the Market

In forex and CFD trading, there is market dynamics influenced by several factors. These factors tend to be different for forex and CFD trading.
In forex trading, trading exchanges generally occur dynamics (fluctuations) which are usually influenced by global situations and events. Trading involving foreign exchange rates is strongly influenced by factors of international political and security conditions, natural disasters and war, global economic prosperity and development, governance of Human Resources (HR) and Natural Resources (SDA) as factors of a country's economic production that trade forex.
For CFD trading, the factors that influence the trading market more specifically lead to the conditions of supply and demand for commodities or changes in trends of the commodity business sector traded through CFD contracts. Examples of factors that affect CFD trading are fluctuations in the stock and bond markets, then changes in international prices for products or commodities with the highest demand.

3. Reasons Investors Trade

The difference between forex and CFD trading also lies in the reasons investors choose to invest in forex or CFDs. The majority of investors choose forex trading, due to several reasons such as for the purpose of 'hedging', speculation, but the most important is for investment activities and international trade.
Forex trading is carried out by central banks, institutional investors, and small speculators (retail). Forex is also traded on the CFD market, but the majority are traded by banks and forex brokers. Investors or small traders usually choose forex contracts that are available in mini and micro units.

#1 - September 20, 2019, 05:15:14 AM

  • Hero Member
  • Posts: 1048
  • Points: 5674
  • Likes Received: 111
  • Reputation: +4/-0
Both forex and CFD trading are trading on margin, the difference may be more specific to the instrument being traded, forex trades currencies while CFD is an instrument other than currency.
#2 - November 12, 2020, 08:56:24 AM

  • Sr. Member
  • Posts: 462
  • Points: 25708
  • Likes Received: 20
  • Reputation: +1/-3
I have never traded CFD but when compared to forex, of course there is a difference, CFD is more to trading on margin on the basis of instruments other than currencies while forex is trading currencies.
#3 - November 18, 2020, 06:50:34 AM

  • Hero Member
  • Posts: 701
  • Points: 5910
  • Likes Received: 39
  • Reputation: +1/-1
actually forex and CFD are not too much difference, it's just for the instrument, en can a little bit different way of trading between forex and CFD.
#4 - November 18, 2020, 06:08:07 PM

  • Sr. Member
  • Posts: 426
  • Points: 51533
  • Likes Received: 7
  • Reputation: +0/-0
forex and CFDs do not have much difference because they are the same as margin trading, but forex is more common and more popular than CFD trading.
#5 - November 26, 2020, 03:01:30 AM

  • Sr. Member
  • Posts: 436
  • Points: 19608
  • Likes Received: 5
  • Reputation: +1/-0
forex and CFD are both similar but there is a slight difference between the two, where CFD uses more contracts unlike forex which only uses margin is sufficient.
#6 - December 02, 2020, 11:41:34 PM

  • Sr. Member
  • Posts: 410
  • Points: 46229
  • Likes Received: 7
  • Reputation: +3/-0
Forex and CFD trading have a difference that lies in the margin or underlying asset, if forex is a direct sale and purchase transaction, while CFD can sell or buy the underlying asset.
#7 - December 17, 2020, 12:12:33 PM

  • Sr. Member
  • Posts: 452
  • Points: 2273
  • Likes Received: 13
  • Reputation: +0/-0
CFD is one of the derivatives of the instrument, en forex trading so that it has similarities, one of which is related to leverage even though basically between forex and CFD it has a difference in the mechanism.
#8 - December 31, 2020, 07:29:37 AM

  • Hero Member
  • Posts: 612
  • Points: 127
  • Likes Received: 36
  • Reputation: +2/-0
currently I focus on forex trading only, because CFD trading in my opinion is less aggressive and tends to be slow, in contrast to the financial markets that are always volatile
#9 - July 19, 2021, 08:50:41 AM

  • Jr. Member
  • Posts: 86
  • Points: 587
  • Likes Received: 4
  • Reputation: +1/-0
whatever it is, I prefer forex trading.
#10 - January 23, 2022, 02:09:15 AM

  • Hero Member
  • Posts: 1214
  • Points: 938
  • Likes Received: 29
  • Reputation: +5/-5
in my opinion it's just a different instrument but in terms of analysis and how it works just in my opinion and we can use the same system for its trading
#11 - February 05, 2022, 06:32:00 AM

  • Hero Member
  • Posts: 3601
  • Points: 0
  • Likes Received: 54
  • Reputation: +5/-7
What I know between the two is the difference in the instrument, forex is the currency traded, if my CFD as far as I know is shares or other instruments
#12 - February 06, 2022, 10:33:26 PM

  • Hero Member
  • Posts: 1309
  • Points: 1095
  • Likes Received: 11
  • Reputation: +0/-7
in this case I might only give an overview that what is meant by CFD is a different instrument with forex trading that trades the currency
#13 - February 08, 2022, 08:51:30 AM

  • Hero Member
  • Posts: 4049
  • Points: 4
  • Likes Received: 249
  • Reputation: +5/-2
Depending on the condition of my hair like now, I prefer forex trading because it is better for the long term and can be used every day.
#14 - February 16, 2022, 12:19:23 AM

  • Sr. Member
  • Posts: 491
  • Points: 0
  • Likes Received: 0
  • Reputation: +1/-1
CFDs may be more like binary which has a contract term.
#15 - February 25, 2022, 11:54:16 PM


0 Members and 1 Guest are viewing this topic.