CFD Brokers – Compare Top CFD Trading Platforms
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 good 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.
How Is Your CFD Broker Regulated?
The first thing any top CFD provider must have in order to attract your business is authorisation and regulation by financial watchdogs (Most common and authoritative regulators are Financial Conduct Authority (FCA UK), Cyprus Securities and Exchange Commission (CySEC Cyprus) and Australian Securities and Investments Commission (ASIC Australia). It is illegal for a broker to operate without a proper 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 regulators 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 company – particularly online, where scams are rife and just a few dollars can get you a professional website and marketing exposure.
Trading Cost and Overnight Charges In Trading CFDs
Fortunately, we compare and review ONLY regulated and reputable CFD brokers and their trading platforms. Another key consideration is the cost of trading, in the form of commissions payable and the applicable interest rates for leveraged positions, we compare spreads for the most traded markets. 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 best brokers on price, you understand fully any terms and conditions that are associated with the trading costs. Oftentimes, companies 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 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.
Range of Markets for CFDs
The range of CFDs offered is 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.
Payment Methods Your CFD Broker Offers
Finally, the processes for depositing and withdrawing your trading profits should also factor in as a consideration when deciding on the best CFD platform. There’s no point in getting familiar with a broker’s trading 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 CFD 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.
Opening a CFD Trading Account
The beauty of contracts for difference trading is that anyone with some capital and the inclination can trade and see the rewards for their labour over a short period of time, with fewer barriers to entry than other forms of trading and more in the way of upside reward for those that get it right.
Before you can get started, one of the few things a CFD trader must do is open a trading account with a reputable firm, to provide the platform on which their CFD trading will take place and to act as the executor of the trader’s commands as markets continue to fluctuate. While this might sound like a straightforward enough task, it is of course much more nuanced, and aspiring traders are advised to take their time in making the right decision before placing that first deposit.
In terms of what you need to actually open a CFD trading account, identification is the only out-of-the-ordinary requirement versus, say, opening an account at a forum or blog. Opening an account is an application process, and some brokers subject new applicants to credit checks to ensure they are creditworthy before leverage is extended – as a result, and to give margin calls validity, brokers often require a series of identification documents to prove who you are and where you live before allowing you to start trading.
Apart from the ID requirements, opening a trading account is technically a very easy task – in fact, it’s not much different from opening any other form of online account, except that you will usually be required to go in to a little more depth about who you are. The real difficulties come in actually getting to that stage, narrowing down a vast field of brokers both in the online and offline worlds to settle on a choice that will stand you in good stead going forward.
Online and Offline CFD Brokers
The first decision you’ll have to take is whether to go online or offline with your broker. It’s a wise recommendation to stick with online brokers unless you have a specific reason for choosing an offline broker – online trading permits instant execution, is cheaper, and allows you to keep a closer eye on your trading performance. But how can it be possible to narrow down the choice of online CFD brokers, with literally thousands to choose from?
Not all CFD providers were created equal, and there are a number of key points of differentiation between competing platforms. Primarily, the cost of transacting can vary significantly between different brokers, and bears directly on the profitability of your trading. A more costly broker will eat in to your trading profits to a greater extent than their cheap and cheerful counterparts, although that might be balanced with a more advanced, intuitive interface and ancillary tools and market analysis – it’s up to you to weigh up whether to go for features or affordability, but it’s essential either way that you make a decision you can live with going forward.
It’s also worth bearing in mind that pricing is not always entirely transparent, and you should do your homework to ensure you’re fully clued up on the terms and conditions that come with your account. In addition to helping clarify the costs you might have to pay, this could also shed light on some of the other hidden policies and procedures of your broker, and a thorough read-through is always advised before you consider committing any funds.
For the novice CFD trader, it’s also worth stressing that headline rates aren’t always what they seem. A low transaction cost that a broker might be touting in its marketing can have strings attached, and may even be a limited time offer which rises after a certain number of trades or a certain period of time – the only real way to be sure is to read for yourself the terms and conditions that apply. While cost shouldn’t be the only factor in making your decision, it remains a vital proponent of what your broker has to offer, and should at least factor in to your decision when opening your CFD trading account.