London  GMT  New York  Tokyo  Sydney 

Recommended CFD brokers

Core Spreads Broker ETX Capital Broker InterTrader Broker


What To Look For In A CFD Broker

Choosing your CFD broker is one of the most important decisions you'll have to take as a trader, and it's rather unfortunate that it comes when many traders are inexperienced and unsure. The choice you make now as to the broker you use will more likely than not stick with you, and unless you are prepared to take on the risk and hassle of changing brokers at some later point, your fate will have been decided long before you're really sure of what you're doing.

While that all sounds pretty ominous, choosing a CFD broker is a decision that can't be underestimated, and you should take care to ensure you know exactly what to look for to help make the process of choosing that bit easier.

The first thing any CFD broker must have in order to attract your business is authorisation and regulation by the FCA - the Financial Conduct Authority. It is illegal for a broker to operate without FCA oversight, and unless the broker clearly presents the fact of their regulation and a register number, it's advisable to move on to the next one. The FCA have the power to enforce legitimate, legal trading on the part of the broker, and without this constant regulation it can be hard to ensure you're dealing with a legitimate, trustworthy broker - particularly online, where scams are rife and just a few pounds can get you a professional website and marketing exposure.

Fortunately, brokers operating in the UK markets without FCA regulation are in the minority, although it still pays to exercise caution at this first, preliminary hurdle. A more key consideration is the cost of trading, in the form of commissions payable and the applicable interest rates for leveraged positions. On this basis, it will be possible to sort brokers without too much complication, and it should be possible to identify the lowest price, lowest interest broker with a little legwork.

Make sure that when sorting brokers on price, you understand fully any terms and conditions that are associated with the trading costs. Oftentimes, brokers run promotions and special offers on transaction fees, which revert back to a higher rate at some later stage (usually when you are already exposed to a number of positions).

The only true way to get to grips with this is to devote some time to reading through the terms and conditions of each CFD broker before you sign-up. While this isn't the most exciting prospect for any would-be trader, it will prove a valuable exercise in learning how brokers operate, and could very well provide you with a few golden nuggets that actually save you money.

The range of CFDs offered and the markets and indices covered are also frequently used as part of the trader's checklist, tending usually to veer towards a wider selection presenting a better trading proposition. It is usually advisable to choose a broker you can live with for the longest possible time, and there can be nothing worse than feeling limited by a tight selection of markets - get a feel for the range of CFDs offered, and try to look for a broker with decent coverage of UK, US and European indices for best effect.

Finally, the processes for depositing and withdrawing your trading profits should also factor in as a consideration when deciding on a CFD broker. There's no point in getting familiar with a CFD broker's platform and going through the motions of applying for a demo account and learning how they function to find out that the payment methods for both deposits and withdrawals don't suit.

While it might seem like a trivial issue, the payment methods on offer are an essential determiner of your future trading experience, and without a variety of options to choose from you may find your trading interrupted, or even find yourself in the bind of cash flow difficulties waiting for withdrawals to land in your bank account. Check out the options on offer and compare them with the competition - the manner in which payments are handled can have a real impact on the amount of money you can make, and can play an essential role in ensuring you're on top of your trading activity.

When searching for the perfect broker for your CFD trading, perhaps the best way to make differentiating an easier process is to get involved and trial different options through setting up demo accounts. While trading demo accounts takes time, it does give you an unbiased insight into exactly how each broker does business, and the look and feel of the trading platforms through which you'll ultimately access the CFD markets.

Home | Brokers | CFD School | Contact | Privacy Policy | Site Map | Advertise with us

Add to: FaceBook Add to: Digg Add to: Add to: Reddit Add to: Simpy Add to: Netscape Add to: Furl Add to: Yahoo Add to: Spurl Add to: Google Add to: MSN Live

A part of

Independent Trading Solutions Limited
788-790 Finchley Road,
NW11 7TJ,
England & Wales.

CFD Spy is a informational website based mostly around online trading, with a current focus towards CFDs, Forex, Stocks and Spread Betting. We aim to list and compare the top online trading brokers and brokerages available. Disclaimer: CFD Spy is meant for informational purposes only, whilst we do our best to make sure is up to date and accurate at all times, we do not make any claims that the content or opinions found within are infact accurate or up to date. Any websites, company/s or services referred to/linked to throughout are not directly affiliated with us, and their inclusion within CFD Spy is not meant to/ and does not convey our sponsorship or support of such company/s or website/s, furthermore, we are not responsible or liable for their availability, content, or delivery of services found therein.

Stocks, Futures , Forex &/or CFD Trading involves substantial risk of loss and is not suitable for all investors; your capital may be at risk. And as a side note, one would be wise to consider that so, for any kind of trading, and you should be fully aware of the risks involved before proceeding with any form.