Best cfd broker reviews
Traders can use any number of broker accounts, and use those with the best terms for specific trades or assets. Trade Gold with one firm, but US Stocks with another. Use whichever account offer you the best deal for that particular trade. Because of the margin, CFDs are usually used by traders looking to trade short term or intraday moves.
The amount of leverage available differs from broker to broker, depending on the product and market. Much like forex, this allows you to trade larger size than you may otherwise be able to, or give you access to expensive stocks that you might not be able to trade. This opens up new markets and opportunities. Exposure to global markets: Most CFD providers offer a huge variety of markets. This can all be done on one account, without the need for expensive data or execution fees.
Trading fees can add up pretty quickly, especially using retail brokers. This is a double edge sword. A small move in the underlying can wipe out the value of your position or more, leaving you in the red with your broker. Entering or exiting a CFD position requires you to cross the spread.
This is the price paid for access to margin. It also makes some strategies very difficult to execute e. Betting against your broker: A CFD is a contract with your broker.
They profit if you lose. This opens up many conflict of interest questions. Get in touch with them directly if you have questions before depositing any money in the account. Spread or Commission The spread or commission hits every trader and every trade. Leverage and Margin The margin represents the funds that a trader must deposit and commit in order to open a trade. Trading platform Trading platforms might be thought of as broadly the same. Deposit and Withdrawal options This is becoming less important as more and more payment methods are added by brokers — but if you have ever had problems making payments or receiving money from a broker because they have a restricted list of withdrawal methods — you will know how important it can be to check first.
Features Charts, Technical Analysis, Research If you plan to research your trades via your broker or their software, you want to ensure you have the best research tools available.
How large is each trade, what is your overall trading aim etc. Deposit real money, and trade Remember: When the price hits your key level, you buy or sell, dependent on the trend.
This is where detailed technical analysis can help. Use charts to identify patterns that will give you the best chance of telling you where the trend is heading. This is all about timing. Then you enter a buy position in anticipation of the trend turning in the other direction. You can follow exactly the same procedure if the price is rising. You can short a stock that has been increasing in price when you think a sharp change is imminent.
Both Wave Theory and a range of analytical tools will help you ascertain when those shifts are going to take place. However, there is always a loss on the horizon. So, you need to be smart. Nobody wants the margin calls and the stress that come with big losses. Having said that, start small to begin with. Keep your exposure relatively low in comparison to your capital. As your capital grows and you iron out creases in your strategy, you can slowly increase your leverage.
A bit like a diary, but swap out descriptions of your crush for entry and exit points, price, position size and so on. This will be your bible when it comes to looking back and identifying mistakes. CFD trading journals are often overlooked, but their use can prove invaluable. A thorough trading journal should include the following:. It may sound time-consuming but it will allow you to constantly review and improve. Each trade you enter needs a crystal clear CFD stop.
This is because emotions will inevitably run high and the temptation to hold on that little bit longer can be hard to resist. So, define a CFD stop outside of market hours and stick to it religiously.
This will also help you anticipate your maximum possible loss. You can then use the time you would be fighting an internal battle to research and prepare for the next trade. However, the switched on day trader will test out his strategy with a demo account first. Plenty of brokers offer these practice accounts. You can make sure it has all the charting and analysis tools your trading plan requires. The best traders will never stop learning. You need to keep abreast of market developments, whilst practising and perfecting new CFD trading strategies.
Learning from successful traders will also help. To name just a few:. This is mainly because of taxes. Different countries view CFDs differently. Some consider them a form of gambling activity and therefore free from tax. Some countries consider them taxable just like any other form of income.
The tax implications in the UK, for example, will see CFD trading fall under the capital gains tax requirements. This means you should keep a detailed record of transactions so you can make accurate calculations at the end of the tax year. So a broker may have the smallest spread for Forex pairs, but the largest for indices — and the figures might change the next day.
Depending on the asset, a broker might be the cheapest choice — or the most expensive. So when comparing brokers and the spread, ensure you are checking the spread on the assets you will be trading most. The margin represents the funds that a trader must deposit and commit in order to open a trade. Where this is the case, the leverage is often illustrated in terms of multiples — so The equivalent margin would be 0. So when comparing brokers, a low margin requires smaller deposits.
This will be important to some traders, but less so to others. Trading platforms might be thought of as broadly the same. This can be a mistake if a trader finds a particular platform difficult to use. Yes, most platforms will have similar functions — but the usability and look and feel can vary — and some will not suit every trader. It is vital to be trading on software that is familiar and easy to use. Traders can miss prices, or worse, make mistakes trading, because the trading platform did not suit them for whatever reason.
The trading buttons might be very clear to some users, but if you are the trader that ended up entering a large trade by mistake, you might wish you had based a broker choice on the clarity of the platform. All of the brands listed here offer demo accounts — try before you buy. This is becoming less important as more and more payment methods are added by brokers — but if you have ever had problems making payments or receiving money from a broker because they have a restricted list of withdrawal methods — you will know how important it can be to check first.
If you plan to research your trades via your broker or their software, you want to ensure you have the best research tools available. Charting standards do differ significantly. Some brokers ETX Capital in particular offer the best charting facilities, with a range of technical analysis tools that will satisfy even the most ardent technical analysis experts. Some brokers however, assume their traders either do not do research, or do it elsewhere. Their tools lag behind some rivals. So again, take a look via a demo account and see if the broker delivers to a standard you need.
As ever, trading on the move will be important to many traders — others will be happy to not use a mobile app. Regulation should be a key criteria for any broker. Only regulated CFD brokers are included on these pages. Bonuses can sometimes sway a trader. Terms and conditions are always important with any bonus deal. They can often cause a new customer to over trade.