CFDs, or contracts for difference, are a class of financial instruments that let you speculate on the value of an underlying asset without having to purchase it and take possession of it.

So, when trading a CFD on EURUSD, or gold, you’re buying (going long), or selling (going short), without having to take possession (or already own in the case of selling) the euros, gold, or whatever the underlying asset you’re trading is.

When you close your trade if the value of the asset is higher than when you purchased (went long), or lower than when you sold (went short), you get to keep the difference as profit on that particular trade. If on the other hand your trades have gone against you, the difference will be reflected in your account balance.