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Using CFD to trade Shares

As a trader, you know CFD trading mainly from trading with the DAX or with currency pairs such as the Euro / US Dollar. However, many CFD brokers nowadays also offer the possibility of trading shares as CFDs. The advantage is, for example, that buying and selling is possible very quickly. To find a good CFD broker, you can also use our broker comparison.

How to sell shares: It is also interesting to ask at what point in time one should sell shares. You can use both fundamental analysis and technical analysis for your investment decisions. Fundamental data include, for example, the following:

•     Publication of economic data (e.g. gross domestic product, ifo business climate index and labour market data)
•     Decisions of the major central banks (e.g. the European Central Bank and the US Federal Reserve)
•     Political events (for example, elections)
•     Publication of quarterly and annual reports of companies

When trading stocks, one should pay particular attention to the publication of companies' quarterly and annual reports. There can often be sharp price movements on the day these reports are published. It is important to know that there is no automatism when it comes to the figures: If, for example, an aircraft manufacturer has managed to sell 2% more aircraft in the past quarter, this does not necessarily lead to rising share prices. This is because the majority of market participants may have assumed that the increase in sales would even be 3 %. In this case, therefore, the figures were deceptive and the share price may subsequently fall.

Usefull strategies

Overall, it makes sense to also use technical analysis when trading shares in platform Exness. The moving averages work very simply here: The so-called 200-day line is particularly popular when trading shares. This is calculated from the average prices of the previous 200 days. As long as the share is quoted above this line, many traders assume that the share is in an upward trend.

It is normal for the share to approach the 200-day line again during a correction phase. In this case, there is no need to sell the share. However, it becomes more critical as soon as the share falls sustainably below the 200-day line. In this case, a downward trend is present and further falling prices are to be expected. In this situation, one can definitely think about selling the shares. Another possibility is to hedge the shares below the 200-day line with a stop loss.

Conclusion

To try out trading with shares without risk, it is a good idea to open a free demo account with a CFD broker. This is because you do not trade with real money on such an account. Rather, the broker provides you with a virtual credit balance. In our experience, this often amounts to 10,000 €. This allows you to test technical indicators such as the 200-day line. If you want, you can also try out trading with the DAX without risk. As soon as you feel confident trading on the demo account, you can continue buying and selling shares on an account with real money.