CFD Brokers and AccountsThere are many factors to be considered when opening a CFD account. Safety of money and the broker's competitiveness always come first. In addition, the fund methods, the asset index, and the available trading platforms are also important to all CFD traders.

CFDs Trading

CFD trading allows investors to trade the direction of a financial asset over the short term. CFDs are simple to use and are especially popular for trading Forex, equity, and commodity products.

 

Key tips when opening a CFD Account

(1) Safety of funds is a top-priority issue

When trading online the safety of your funds is priority number one. Before opening an account make sure that your CFD broker is regulated and based on a reliable county. Traders can take advantage of the live chat service on each broker's website to answer all their questions. Even CFD brokers domiciled in offshore countries should offer a segregation between corporate funds and client funds.

» CFD Ratings at FxPros.net

(2) Make sure that a CFD Broker is suitable for your needs

After the safety of your funds is guaranteed, make sure that you find a CFD broker that covers your basic requirements. Firstly, make sure that the available fund methods suit your needs. Not only for your current deposits but also for your future withdrawals. Secondly, make sure that the assets you desire to trade are available. Finally, the availability of trading platforms is also an important issue. Some CFD providers offer only a web-trader platform, but others also offer more advanced trading platforms, such as MetaTrader-4 or cTrader. If you implement an intraday trading strategy, make sure scalping is fully allowed. Some CFD brokers forbid scalping.

(3) Compare Trading Terms and Promotions

After you have chosen 2-3 CFD brokers that can cover all your basic needs, it is time to compare their trading terms. CFD brokers are not charging trading commissions, therefore, you just have to compare their trading spreads. Some CFD brokers may prove very expensive, especially as concerns less-popular assets, such as Forex minors or small-cap stocks. For example, if you trade Forex, you shouldn’t accept trading spreads of more than 2 pips. Moreover, you should consider the potential of receiving a trading rebate (if it is available), to reduce your trading cost.

(4) Rebates and Volume Discounts

If you plan to trade very often (for example intraday) or you intend to trade a lot of money, then you should consider joining a Trading Rebate program. Such programs offer the opportunity to make money in the form of receiving cashback. A trading rebate means you make money out of your trading volumes.

 

Comparing CFD Brokers

This is a comparison of some popular CFD brokers. All the following companies are large and regulated, they offer segregated client bank accounts, they are very competitive, and have been in the market for more than 5 years. 

CFD BROKERS

CFD TRADING

TECHNOLOGY

ACCOUNTS

INFORMATION

 

REGULATION:

  • FSC 000138/7

SEGREGATED CLIENT ACCOUNT: YES

US TRADERS: NO

EUROPEAN TRADERS: YES

SWAP-FREE ACCOUNTS: YES

YEAR OF FOUNDATION: 2009

DOMICILED IN:

  • Belize

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

 

Review RoboForex CFDs

REGULATION:

  • FSC of the Republic of Vanuatu

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

 

Review TitanFx

 

 

REGULATION:

  • MFSA (Malta)

  • FSC (Mauritius)

SEGREGATED CLIENT ACCOUNT: YES

US TRADERS: NO

EUROPEAN TRADERS: YES

SWAP-FREE ACCOUNTS: YES

YEAR OF FOUNDATION: 2002

DOMICILED IN:

  • Malta & Mauritius

■ 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:

  • Fully allowing auto-trading and scalping

$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.

 

Open an Account with FXDD

 

Review FXDD

 

REGULATION:

  • FSA (Seychelles)

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:

  • NYSE STOCKS CFDs

  • NASDAQ STOCKS CFDs

  • ASX STOCKS CFDs

■ 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

 

► Review IC Markets CFDs

 

 

Two Types of Online Brokers

In general, there are two types of online brokers:

  • Market Makers or CFD Agents
  • Direct market access providers (DMA)

These two different types of brokers offer different features and advantages.

(1) Order Execution

Market Makers, as the name suggests, create a market within a market. When a client places an order they take the exact-sized opposite position in order for the trade to be filled. On the other hand, DMA brokers fill their client orders using the market’s liquidity, and therefore a trade may be filled at several different prices. Market Makers charge re-quotes but DMA brokers don’t. Note that price re-quotes occur when there is not sufficient volume to fill an order.

(2) Asset Index

Market makers are able to cover a wider range of asset classes. The asset index of a Market Maker usually contains 100s of world shares, 100s of Forex pairs, 10s of Indices, and 10s of commodities. On the other hand, DMA providers offer a considerably smaller range of financial classes and assets.

(3) Cost of Trading

Comparing the trading cost between these two types of providers gets a little bit complex. In general, DMA brokers can offer their clients better pricing. In addition, during news releases, Market Makers add high re-quotes to the available prices and news-trading becomes very expensive. DMA brokers constitute a better selection for intraday traders and news traders.

(4) Trading Platforms

Market makers provide usually a great selection of trading platforms including MT4, web traders, mobile traders, etc. On the other hand, usually, DMA providers offer modified versions of trading software that are supplied by 3rd parties (for example, MT4/MT5).

(5) Company Size

In general, Market Makers are larger companies than DMA providers. That means that Market Makers can offer lower margin requirements and a wider selection of deposit methods. Market Makers are also able to offer better promotions to their new customers.

 

Notes:

  • Leveraged trading is allowed on both these types of CFD providers

  • Traders can have accounts with multiple providers to get the best trading terms

 

Opening a CFD Account

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