CFD stands for Contract for difference. This contract is between an investor and broker just like stocks it is traded on an exchange but when a trader trades an asset on CFD, he doesn’t own the assets. When a trader trades an asset on CFD, he invests only a fraction of the money, called the Margin. 

When you trade an asset on CFD and take a long position, if the prices go up as you predicted it to be,your profit will be difference between the opening and closing prices. So, the higher the price will go the more profit you will make. However, if the prices don't go up as you predicted it to be, then the lower the price will go the more loss you will make.  

When you trade an asset on CFD and take a short position, if the prices go down as you predicted it to be,your profit will be the difference between the opening and closing prices.So, the lower the price will go the more profit you will make. However, if the prices don't go down as you predicted it to be, then the higher the price will go the more loss you will make.

Trading with CFDs is not cheap. It still requires traders to have capital available that they are willing to lose. Depending on the instrument, trading could be executed with a little sum or a few thousands. Thanks to leverage, the initial "cost" of the investment is less than the equivalent on the underlying asset. CFD’s allow you to access Global Markets (GOLD, OIL, APPLE, GOOGLE, AMAZON etc)