Forex Stock - CFD & Stock trading in Forex

For many individuals, the stock market seems like a fancy investment destination. When big names like Apple, Facebook, Johnson & Johnson, and Adidas are involved, people seem to believe that the stock market is a great place to earn additional revenues.

However, it is not always easy to start investing in stocks. While the above companies seem to offer a very promising future, the cost of buying the shares is quite high. That is why most retail traders choose to stay away from the stock market, especially when they have a limited amount of capital.

Nevertheless, this was the case until the advent of the CFD trading system.

CFD stock trading is an innovative solution for trading in the stock market. It acts as a bridge between the giant stock market and retail traders, so you can be a part of it even if you have a limited amount of money in your pockets right now.

What is the Stock Market?

When you have a company, you may need more money to expand your business. So how do you get the money? By selling shares of your company’s ownership to the public via the stock market.

The stock market is full of companies looking for investors. In exchange, these companies will offer a part of their ownership, i.e., a share, to the investors or shareholders.

Furthermore, stock trading transactions take place in a stock exchange, with the help of a mediator or a broker. The biggest stock exchanges in the world right now are the NYSE (New York Stock Exchange), the LSE (London Stock Exchange), and the NASDAQ, which usually open from 9.30 AM to 4 PM.

How does Stock Trading Work?

As a shareholder, you can choose to hold your shares for long-term investment and get a portion of the company’s profits (dividends) regularly, depending on the number of shares you own.

On the other hand, due to the volatility of the stock prices, you can choose to sell your shares when the prices increase. That way, you will be able to profit from the difference between the current price and the price when you bought the shares.

That is called stock trading.

New traders are highly recommended to invest in reputable companies that can maintain their financial positions for at least the next 10 years. That is to say, you can invest in huge companies such as Apple, Adidas, and Facebook. But these investments will cost you hundreds of dollars for just one share. And you will still need to pay for taxes and commissions.

Alternatively, you can always bet your money on the newly-founded companies that will offer much more affordable prices for their shares. However, nobody can guarantee whether these new companies will rise in value, or just close down in the next year.

So, is there any way for retail traders to invest in the stock market at affordable prices? Yes, there is. You can join the Forex Stock CFD trading and spare some money for other investments.

What is Forex Stock Trading?

In the conventional stock trading, you invest your money in a company and get a share of the company’s ownership. But in the CFD stock trading, you do not buy parts of the company’s ownership and instead speculate on the price of the company’s shares in the market. That way, you will be able to take advantage of the stocks’ price movements regardless of the price direction.

Moreover, CFD stands for Contract for Difference. In essence, you and the service providers—usually called brokers - sign a contract to pay for the price difference of the traded assets. If your trades result in profits, the broker will pay you for the price difference, however, if you close your trading position at a loss, you need to cover the price difference.

How does Forex CFD Stock Trading Work?

Unlike conventional stock trading, you do not have to possess a certain amount of shares to start trading in CFDs. You can begin with a long position, meaning you choose to buy the stocks whenever you think the price is going up. Or you can start your CFD trading with a short position any time you believe that the price of the stock is going down.

If you start with a long position and the stock price increases, you can sell the stocks at a higher price. The difference in the price will be your profits. But if your prediction is wrong and the price goes down, it will be a loss that you have to cover.

The same thing applies when you begin your trade with a short position. You decide to sell the stocks and buy them at a lower price when you close the trade. But if the price is rising in value, you will have to buy back at higher prices, which will result in a loss.

In addition, you can choose to invest in any company you prefer by using Forex CFD stock trading, as long as they are available to trade with your Foex broker. You just need to register and open a verified account on the Foex broker’s website and start trading immediately.

Best Forex Stock/CFD Brokers

Your endeavor in CFD stock trading starts by choosing the right Forex broker as your trading partner. You have to make sure that your Forex broker offers not only the best deals in the stock prices but also lower costs and higher leverage.

XM Malaysia

CFD stock trading at XM is offered via a USD-based Shares Account with a 5% to 20% margin required for trading transactions, and various spreads depending on the shares. The shares at XM are provided in an extensive range from US, UK, European, to even Australian and Brazilian companies, with a minimum deposit of 10,000 USD.

Years of experience in the Forex business has turned XM into a thriving Market Maker broker, serving over 3,500,000 clients from 196 countries. Traders’ safety and security are guaranteed at XM since the company is licensed and regulated by four different regulators, namely FCA (UK), ASIC (Australia), IFSC (Belize), and CySEC (Cyprus).

Open XM Stock Trading Account

XM Malaysia Review

FBS Malaysia

CFD Stock trading at FBS is offered only on Cent and Standard Accounts. With a minimum deposit of only 1 USD for Cent Account and 100 USD for Standard Account, you will be able to trade CFD stocks with a spread as low as 1 pip and leverage up to 1:3000 for Cent Account or 1:3000 for Standard Account. FBS offers 33 types of stocks from various international companies with a $3 commission.

Founded in 2009 under the name of FBS Markets Inc., FBS is now commonly recognized as a broker that offers the most extensive promotional programs. Over the last decade, FBS has managed to obtain licenses from IFSC of Belize and CySEC of Cyprus.

Open FBS Stock Trading Account

FBS Malaysia Review

HFM Malaysia

CFD stock trading is offered at HFM on all available accounts from Micro to HFCopy. The minimum deposit required for the Micro account is only 5 USD, and you will be able to trade in 56 types of CFD shares with leverage up to 1:14. Spreads offered at HFM for CFD stock trading are variable, starting from 0.012 to 1.6 pips, depending on the traded share. However, you will have to pay a 0.1% commission.

HFM was founded in 2010 by the “HF Market Group”, a global leader in the world of Forex trading. “HOT” in HFM stands for Honesty, Openness, and Transparency, a set of values that has made the company reputable, and thereby, achieved licenses from seven major regulatory bodies, namely IBC of St. Vincent & the Grenadine, DFSA of Dubai, FCA of the UK, CySEC of Cyprus, FSC of Mauritius, FSCA of South Africa, and FSA of Seychelles.

Open HFM Stock Trading Account

HFM Malaysia Review

HYCM Malaysia

HYCM offers stock trading services on all trading accounts, namely FIXED, CLASSIC, and RAW. You can enjoy CFD stock trading at HYCM with a minimum deposit of only 100 USD for FIXED/CLASSIC accounts and trade over 60 stocks with floating spreads as low as 2 pips. The maximum variable leverage offered at HYCM for stock trading is 1:20 for US stocks and 1:10 for European stocks; however, you need to pay a $4 commission if you want to trade using the HYCM RAW account.

The company was first founded under the name of Henyep Gold Dealers, then joined the Hong Kong Gold and Silver Exchange Society in 1977. HYCM’s first license was obtained from the FCA of the UK in 1998, and today the company has several licenses from other major regulatory bodies, including CySEC of Cyprus, CIMA of Cayman Island, and DFSA of Dubai.

Open HYCM Stock Trading Account

HYCM Malaysia Review

IronFx Malaysia

Trading in the stocks market via IronFX is available in CFD shares trading on MetaTrader 4 platform. At IronFX, you will be able to trade in the shares of widely known companies such as Apple, Walt Disney, McDonald’s, and Johnson & Johnson, available in extremely tight floating spreads as low as 0 pips with fast order execution and negative balance protection. The minimum lot size required for each trading contract is 1 lot—equals 1 share of each company—with approximate leverage of 1:10. On top of everything, stocks trading at IronFX requires only a minimal 0.10% commission.

IronFX is one of the most prominent Forex brokers with over 1.2 million retail traders from more than 180 countries and has obtained multiple licenses from several major regulatory bodies such as the CySEC of Cyprus, FCA of UK, and ASIC of Australia. Founded in 2010, this broker offers 7 different trading accounts in 6 different asset classes: Forex, metals, indices, commodities, futures, and shares with the best trading conditions.

Open IronFx Stock Trading Account

IronFx Malaysia Review

FXTM Malaysia

FXTM offers the CFD stock trading service using a Stock CFDs Account with spreads as low as 0.1 pip and maximum leverage of 1:10 for US shares and 1:3 for European shares. By making a minimum deposit of only 100 USD, you can enjoy CFD stock trading services with over 120 US shares and 40 European shares using one of the most popular trading platforms, MetaTrader 4. The good news is that FXTM does not charge any commission for any trading transactions, so you don’t have to worry about additional or hidden costs.

Launched in 2011, FXTM is one of the fastest-growing Forex brokers to have obtained licenses and regulations from three major regulatory bodies, namely CySEC (Cyprus), FCA (UK), and IFSC (Belize).

Open FXTM Stock Trading Account

FXTM Malaysia Review

Benefits of Forex Stock Trading

While it may be true that joining the stock market using CFDs does not give you the ownership of the shares, you will gain the following benefits:

👍 1. Lower Capital

Conventional stock trading requires you to have a higher amount of capital to start trading. However, with CFDs, you can start trading with capital as low as 100 USD, depending on the broker’s account policy.

👍 2. Lower Costs

The costs of the CFD trading system are much lower than conventional stock trading. Generally, you just need to pay the difference of the market price and the broker price, which is usually included in the spread. Some brokers also charge commissions, however, the amount is usually lower than that of stockbrokers.

👍 3. Leveraged Trading

By joining the CFD stock trading, you can benefit from the leverage offered by most brokers. It means that you can trade in a much higher amount than your initial capital, resulting in higher profits than conventional stock trading. It is commonly offered at an average of 1:20 or a 5% margin of the whole traded amount. It means that with only 50 USD, you can open a trading position up to 1,000 USD.

Please note that leveraged trading may result in higher risk. That is because while the profits are offered at a higher percentage, the same numbers will also apply if your trading endeavors result in a loss.

👍 4. International Market from One Account

In CFD stock trading, you just need to register for one account with the broker of your choice, and then you will be able to access various stocks from different countries in the stock market as long as they are available in your broker’s list. You can trade stocks with American companies in USD or with British companies in GBP all from one account and one trading platform.

👍 5. Go Long or Short Anytime

Unlike conventional stock trading, you do not have to buy a bunch of expensive shares to start trading via CFD systems. You can open your trade with a long/short position depending on your speculation on the market price, and close the trade anytime you want to since CFD trading hours are more flexible.

Nevertheless, maintaining your position overnight will still cost you a fee depending on the broker’s policy.

👍 6. Take Profits Regardless of Trend

Conventional stock trading applies the old rule of buy low/sell high since you need to trade the assets first so you can sell them later. Therefore, when the market price decreases, you will be at a loss.

Yet with Forex Stock trading, you can still make profits even when the market price is decreasing as long as you have formulated the right strategies and made the right predictions since you can start your trades with a long/short position.