Thread: CFD and Forex Trading

CFD and forex trading are both international financial instruments. A contract for difference can be traded on international commodities, indices, treasuries and shares. CFDs are cash-settled, and no ownership rights of the underlying asset are transferred. Both short and long positions can be opened depending on whether the trader holds a bullish or bearish sentiment on the asset. Foreign exchange trading is done on a worldwide scale. Currencies are not normally traded through a central exchange. Forex is decentralized and trades primarily over the counter. Currency values are traded relative to another currency. Trades are made in currency pairs, with one currency being used to buy another.

By far the greatest advantage of trading your own system and using your own funds is the lessons you learn along the way. Some of these lessons are painful and some are gentle reminders to slow down. Unfortunately when you trade using an automated system you find your bank account depleting but you're none the wiser as to why. Was the system just out of favour in the market? Did it generate signals it wasn't supposed to due to an error? Have market conditions changed and so the system needs to adapt? Are the previous positive results due to over optimizing and curve fitting the system to show impressive returns?