There are many factors to consider when opening a CFD account. The safety of your funds and the broker’s competitiveness should always come first. Additionally, funding methods, the asset index, and available trading platforms are important considerations for all CFD traders.
CFDs Trading
CFD trading allows investors to speculate on the price direction of financial assets over the short term. CFDs are simple to use and especially popular for trading Forex, equities, and commodities.
Key tips when opening a CFD Account
(1) Safety of funds is a top priority
When trading online, the safety of your funds must be your number one concern. Before opening an account, ensure your CFD broker is regulated and based in a reputable country. Traders can often use live chat services on brokers’ websites to get their questions answered. Even brokers domiciled offshore should offer segregation between corporate and client funds.
(2) Ensure the CFD broker suits your needs
Once fund safety is assured, find a CFD broker that meets your basic requirements. First, check that the funding methods suit your current deposits and future withdrawals. Second, verify that the assets you want to trade are available. Finally, consider the trading platforms offered. Some brokers provide only web-trader platforms, while others offer more advanced options like MetaTrader 4 or cTrader. If you plan to trade intraday, confirm that scalping is permitted, as some brokers prohibit it.
(3) Compare trading terms and promotions
After narrowing down to 2-3 brokers that meet your needs, compare their trading terms. Most CFD brokers don’t charge commissions, so focus on comparing spreads. Some brokers may charge high spreads, especially on less popular assets like Forex minors or small-cap stocks. For Forex trading, spreads above 2 pips are generally unacceptable. Also, consider any available trading rebates that can reduce your costs.
(4) Rebates and volume discounts
If you trade frequently (e.g., intraday) or in large volumes, consider joining a trading rebate program. These programs offer cashback based on your trading volume, allowing you to earn money back from your trades.
Comparing CFD Brokers
Below is a comparison of some popular CFD brokers. All the listed companies are large, regulated, offer segregated client bank accounts, are highly competitive, and have been in the market for over five years.
|
CFD BROKERS |
CFD TRADING |
TECHNOLOGY |
ACCOUNTS |
INFORMATION |
|
REGULATION:
SEGREGATED CLIENT ACCOUNT: YES US TRADERS: NO EUROPEAN TRADERS: YES SWAP-FREE ACCOUNTS: YES YEAR OF FOUNDATION: 2009 DOMICILED IN:
|
More than 100 instruments and trading tools
■ 35+ Forex Pairs (Majors, Minors, Exotics) ■ Trade ETFs and Futures ■ Stock-Indices ■ Energy Assets ■ Precious Metals ■ Soft Commodities |
PLATFORMS AVAILABLE: □ MT4 Platform □ MT5 Platform □ RStocksTrader Platform □ WebTrader & Mobile Traders SCALPING / AUTOMATED TRADING: YES
|
$10 minimum deposit
PROMOTION: Free VPS
DEPOSIT METHODS: Cards Bank Wire Skrill Neteller AdvCash PerfectMoney |
RoboForex is a good choice for scalping and automated trading: Fast execution and 1.3 pip on EURUSD without commissions.
► Open an Account with RoboForex
|
|
REGULATION:
SEGREGATED CLIENT ACCOUNT: YES US TRADERS: NO EUROPEAN TRADERS: YES SWAP-FREE ACCOUNTS: NO YEAR OF FOUNDATION: 2014 DOMICILED IN: Vanuatu |
■ 60 Forex Pairs (Majors, Minors, Exotics) ■ 18 Equities Indices plus VIX and USDX ■ Over 100 US Shares plus 40 Japanese Shares ■ Energy Assets (Brent, WTI, and Natural Gas) ■ Gold, Silver, Platinum, and Palladium( 4 precious metals in total) ■ 10 Soft Commodities ■ Over 20 Cryptocurrency Pairs |
PLATFORMS AVAILABLE: □ MT4 Platform □ MT5 Platform □ WebTrader & Mobile Traders
SCALPING / AUTOMATED TRADING: YES |
$200 minimum deposit
PROMOTION: Free VPS Demo Trading Competition
DEPOSIT METHODS: Bank Transfer Credit cards Skrill Neteller UnionPay |
TitanFx is specializing in Asian traders. The broker focuses on facilitating scalping and automated trading:
► Open an Account with TitanFx
|
|
REGULATION:
SEGREGATED CLIENT ACCOUNT: YES US TRADERS: NO EUROPEAN TRADERS: YES SWAP-FREE ACCOUNTS: YES YEAR OF FOUNDATION: 2002 DOMICILED IN:
|
■ 65 Forex Pairs (Majors, Minors, Exotics) ■ Trade Gold (USD and EUR terms) ■ Silver (USD and EUR terms) ■ Copper, Platinum, and Palladium ■ Energy commodities ■ Stocks and Indices ■ Cryptocurrencies |
PLATFORMS AVAILABLE: □ MT4 Platform □ MT5 Platform □ WebTrader & Mobile Traders SCALPING / AUTOMATED TRADING:
|
$100 Minimum Deposit Amount
PROMOTION: Free TradingCentral Analysis
DEPOSIT METHODS: Bank Transfer Credit cards Skrill Neteller UnionPay |
Trading 65 Forex pairs with tight spreads through MT4/MT5 and a wide variety of trading options.
► Review FXDD |
|
REGULATION:
SEGREGATED CLIENT ACCOUNT: YES US TRADERS: NO EUROPEAN TRADERS: NO SWAP-FREE ACCOUNTS: YES YEAR OF FOUNDATION: 2007 DOMICILED IN: Seychelles |
■ Forex Pairs (Majors, Minors, Exotics) ■ Equities: 15 major stock indices Hundreds of different stocks:
■ Energy Assets: Brent and WTI ■ Gold and Silver on the Spot (4 metals in total) ■ Cryptocurrencies |
PLATFORMS AVAILABLE: □ cTrader Platform □ MT4 Platform & MT5 Platform □ WebTrader & Mobile Traders SCALPING / AUTOMATED TRADING: YES |
$200 minimum deposit
DEPOSIT METHODS: Credit cards Skrill Neteller Bank Transfer WebMoney |
IC Markets is good for scalping and automated trading:
► Open an Account with IC Markets
|
Two Types of Online Brokers
In general, there are two main types of online brokers:
-
Market Makers or CFD Agents
-
Direct Market Access providers (DMA)
These two types of brokers offer different features to their clients:
(1) Order Execution
Market Makers, as their name implies, create a market within a market. When a client places an order, the Market Maker takes the exact opposite position to fill the trade. In contrast, DMA brokers execute client orders by accessing the market’s liquidity directly, meaning trades can be filled at multiple price levels. Market Makers may charge re-quotes, while DMA brokers do not. Price re-quotes occur when there isn’t sufficient volume to fill an order at the requested price.
(2) Asset Index
Market Makers typically offer a broader range of asset classes. Their asset index usually includes hundreds of global shares, hundreds of Forex pairs, dozens of indices, and dozens of commodities. DMA providers generally offer a significantly smaller range of financial assets.
(3) Cost of Trading
Comparing trading costs between these broker types can be complex. Generally, DMA brokers can provide better pricing to clients. During news releases, Market Makers often increase re-quotes and widen spreads, making news trading costly. Therefore, DMA brokers are usually better suited for intraday and news traders.
(4) Trading Platforms
Market Makers typically offer a wide variety of trading platforms, such as MetaTrader 4, web traders, and mobile apps. On the other hand, DMA providers usually offer customized versions of third-party trading software like MT4 or MT5.
(5) Company Size
Market Makers are generally larger companies compared to DMA providers. This allows Market Makers to offer lower margin requirements, a wider selection of deposit methods, and more attractive promotions to new customers.
Notes:
-
Leveraged trading is available with both types of CFD providers.
-
Traders can open accounts with multiple providers to take advantage of the best trading terms.
■ Opening a CFD Account
ExpertSignal.com
