Forex which is short for foreign exchange is a global market of currency vs currency, where you speculate on which currency is stronger than the other. EUR/USD means Euro vs US Dollar and if it goes up, Euro is stronger than USD, if it goes down, USD is stronger. Same with something like USD/JPY, if it goes up USD is stronger, if it goes down, JPY is stronger. It’s an excellent way to see which economies are globally stronger than others because of how strong their currencies are.
CFD which is short Contract for Difference, is a way to trade the price differences without actually owning the asset. Example: You buy an asset worth $100 for 10 contracts or $1,000, the asset price goes up to $110 so your 10 contracts are now worth $1,100 and you made $100 profit. With CFDs you can trade a wide range of assets, not just currencies and stocks.
So, the question remains, which one is better for you?
If you want tight spread for good execution, deep liquidity markets with a lot of volume, go with forex. You will be limited to 10 assets, because if you trade anything outside of the major currencies your experience will not be as good because of low volume and not a lot of liquidity. You are limited but these assets are really consistent and are some of the most traded assets on the planet, especially pairs like EUR/USD, GBP/USD and USD/CHF.
But if you want volatility, news trading, a wide range of assets quick and accurate scalps, go with CFDs. You will be able to trade massive leverage and have a large arsenal of assets including stocks, crypto, forex, indices and commodities.
Essentially, you need a REALLY GOOD strategy if you want to trade CFDs and be profitable, simply because of the volatility that it has, it gives it more randomness in a sense.
If you want something with more predictable volatility, then currencies are your better option, but like I said, stick to the major currencies only. You don’t want to be trading exotic random pairs like US Dollar vs Turkish lira; you’re going to have a very bad time.
In my opinion, if you already have a good strategy in forex, you can definitely make the switch to CFDs to give you that wider range of options, it’ll take a while to adjust but it might be worth the switch because of the potential that CFDs hold.
(Just my opinion, not financial advice)