There are many good CFD brokers that can provide you with sophisticated user-friendly trading platforms however it is important to ensure that you choose the best CFD trading broker to suit your trading needs not just the broker with the best product range or best-looking trading platform.
Choosing a best trading broker can be difficult and it’s impossible to try them all. Of course, before opening a CFD trading account with any CFD broker, it is important to determine what type of CFD you will trade. Many novice traders are often caught up in the product range thinking they will be trading every CFD that their broker has to offer, when in reality they often find that they stick to sharing, index or Forex CFDs. Once you’ve determined which products you want to trade, then it’s important to develop a trading plan because it will ultimately determine what you need from your trading broker.
Range of trading instruments
It is advantageous to be able to invest in multiple financial markets at the same time. A good choice is to work with a forex broker who offers a wide variety of markets to trade on, such as CFDs on indices or commodities and cryptocurrencies, stocks, or ETFs.
The lever (leverage in English) is therefore an important differentiator and CFD brokers. Indeed, it is often possible to bet much more than the initial capital. The higher the leverage, the lower the starting stake and therefore the effort. Be careful though because it is possible to lose a lot and very quickly by using the lever, even if conversely the gains can be higher.
If you are looking for high frequency day trading, make sure that the brokers you are considering do not place limits on trading styles. A scalping broker has no minimum waiting period between the market price, the stop-loss, and the profit to be taken.
Means of payment
The majority of CFD trading brokers offer bank transfers and credit cards as a means of depositing or withdrawing money. There are also other types of transfer possible depending on the broker, such as PayPal, Skrill or other electronic wallet platforms.
Different types of trading accounts
A good broker should offer you some types of accounts with different benefits for specific trading styles, such as those with higher protections, or greater influence or spreads, or different ranges of instruments.
Trading platforms are an essential element since they allow you to open and close your positions, manage your portfolio, do technical analysis and manage your orders. Even if they don’t determine whether you gain or lose on their positions, they greatly facilitate the entire trading experience. You must therefore choose a broker whose platform is suited to your needs. For that demo accounts exist and allow to test most of the tools provided by the broker.
Fixed or floating spreads
Spreads play a key role in trading. Brokers always display this spread: this is the bis-ask spread, in other words the difference between the buying and selling prices. It is in the trader’s interest to trade CFDs with tight spreads. During certain geopolitical events or economic announcements, CFD spreads can double or triple. Floating spreads fluctuate by nature and can be very tight but also very wide. A fixed spread will not necessarily be attractive at first glance, but it will guarantee a certain level of execution.
Custom Tools and Add-ons
Good Forex brokers should offer valuable support to their traders. For example, Admiral Markets created the add-ons MT4 and MT5 Supreme Edition and made them available for its Forex and CFD Live Trading account, as well as for its demo trading account. These tools aim to help Forex and CFD traders make more money, with less exertion.
The CFD broker legislation is strict. The regulation and authorization of financial institutions by the competent bodies is to be taken into account seriously, quite simply in the interest of the trader or the investor. A broker who is not authorized by any recognized organization is to flee. So always prefer a broker listed with these official financial organizations.
As mentioned above, there are many factors that you need to consider when selecting your broker. Nevertheless, with the help of this guide we have provided, you should be able to see which broker is best suited to your needs. To further facilitate your search, we have also conducted in-depth reviews and verified each of the brokers on our recommended list to ensure they meet the right standards. Once you have found the right broker to work with, you can focus more on your trading activities and trading with more confidence thus increasing your chances of successful trading in the market.