Plus500 is a popular trading platform that offers CFD trading to traders all over the world. The holding company that contains all Plus500 companies is listed on the Nasdaq stock exchange. You can buy stock in this company.
In this Plus500 review, we are going to take a closer look at Plus500 and see if Plus500 is a good choice for amateur investors.
Is plus500 a scam?
No. Plus500 is not a scam. They are an honest trading platform that offers trading all over the world. They operate several different companies in different countries and always offer trade regulated by a local jurisdiction. If you live in a country where trading is less popular, then another country in the region might regulate the trading. Plus500 is licensed by a number of very trusted financial regulated such as the FSA.
Plus500 offer honest trading.
Is Plus500 easy to use?
Plus500 is very easy to use. The trading platform is very well designed and user friendly. Anyone can trade using Plus500. The broker offers some more advanced functions that are harder to use, but amateurs do not need to use these functions to be able to trade. You can learn how to use these functions when and if you want to do so. You can trade on desktop and mobile. Read more about how to trading using Plus500.
What financial instruments can you trade using Plus500?
Plus500 only offer CFD trading. They offer CFDs based on a wide variety of different assets including stocks, currencies, cryptocurrencies, commodities and indices. CFDs based on commodities such as gold and oil are very popular on Plus500. So is currency based CFDs. The trading of currency based CFDs is a type of forex trading.
What is a CFD?
A CFD is a financial instrument that is based on an underlying asset. Most CFDs are leveraged financial instruments. CFD is an abbreviation of Contract For Difference. This name says a lot about how the financial instrument work. When you buy a CFD, you do not buy the underlying asset. Instead, you enter into a contract that gives you the right to the difference in price if the underlying asset increase in value. You also assume the responsibility to pay the difference if the underlying asset goes down in value. If you trade a leveraged CFD then you will have the right to, and the responsibility to pay the change in value multiplied with the leverage. If you buy a 1:30 CFD than you will earn or lose 30% for every 1% that the underlying asset changes in value.
You can also choose to invest in bear CFDs. They work the opposite of regular CFDs. If you invest in a bear CFD you will earn money if the asset goes down in value and lose money if it goes up in value.
The largest possible loss you can suffer when trading a regular CFD is your investment multiplied with the leverage. Bear CFDs can theoretically cause unlimited loses.
The maximum profit from a regular CFD is theoretically unlimited. The maximum profit from a bear CFD is your investment multiplied by the leverage.
Regular CFDs do in theory offer you the potential for larger profits and is lower risk than bear CFDs. CFDs are, however, mainly used for day trading and extreme market movements are rare. Both types of CFDs are, therefore, under normal conditions equal.
Your maximum loss is sometimes limited by local law. This is, however, not the case in all jurisdictions.
Are CFDs a scam?
No. CFDs are not a scam. They can be a very powerful tool that allows day traders to make large profits on small trades. With this said, CFD trading is very high-risk, and you always risk a large loss every time you make a trade. CFD trading can be hazardous if you do not know how to use them in a responsible, safe way. CFDs are not good financial instruments for amateur investors. The risk is too high, and it is too hard to make money.
Most people lose money.
Most people who try CFD trading end up losing money. Only one in four traders end up making money and become successful traders. The rest ends up losing money. CFD certificates are therefore not suitable for amateur traders that do not have a lot of time to devote to their trading. It requires a lot of hard work to become a successful CFD trader. You must be willing to learn a lot before you start trading, and you will need to spend numerous hours every day analysing the market if you want to be able to succeed. Amateurs can succeed. But most will fail.
Plus500 is a good trading platform that is very easy to use. It would be an excellent choice for amateurs if they offered trade in other financial instruments than CFDs. CFD trading is unfortunately not suitable for amateur traders due to the high risk, and due to that, so many people end up losing money. Plus500 is for this reason, not a good choice for amateur traders. Amateur traders are better of opening an account with a broker that offer lower-risk investments such as stocks.