When searching for the best CFD broker 2020, you will have doubts and it will be difficult for you to make a decision, but in the long run you will get huge benefits by spending your time. The richest investors have complete control of their time. Finding a platform that meets your needs gives you the ability to trade the way you want and what you want. Choosing the right CFD trading accounts offers many advantages, such as you can trade in the markets you want, spreads and commissions with which you are happy, keep your trading deposit safe, find a company that you are personally happy with, and most importantly, now there are many financial service providers on the market, and we have selected the Best CFDs Brokers.
What is CFD?
Contract For Difference (CFD) are financial instruments or assets that allow traders to profit from price fluctuations rather than acquire real assets. This is an agreement between two people that will have to pay the difference between the current price of the underlying asset and the price that will be at the time the transaction is closed. Basic assets include stocks, indices, cryptocurrencies, currency pairs, commodities and others. In other words, CFDs are derivative products that are priced based on the underlying asset being tracked.
Everyone who trades CFDs should be aware that he is using a highly speculative trading instrument that can bring not only huge profits, but also losses. Trading CFDs is a particularly interesting offer for investors who are willing to take the risk of speculation with any underlying assets. Before taking specific actions, it is recommended to conduct a comprehensive review of the offers offered by online brokers, as their conditions are often very different from each other.
Contract For Difference
There are many benefits of CFDs. But it all depends on whether these benefits are real or not. Most traders rate CFD benefits by:
- Ability to set Stop Loss and Take Profit automatically;
- CFD products can usually be traded within 24 hours;
- High leverage from a leverage of 1:1 to a leverage of 1:1000.
CFD Spread or Commission
This spread or commission affects each and every trader, which means “value” in the trade. Therefore, it is important to compare one broker with another. Direct comparisons can be difficult. Spreads vary between assets and can change daily if the assets are very volatile. Therefore, the broker may have the smallest spread for currency pairs, but the largest for indices – and the numbers may change the next day. A broker can be both the cheapest and most expensive option. Therefore, when comparing brokers and spreads, make sure that you look at the list of assets with low spreads in order to trade with minimal costs.
CFD Leverage and Margin
Leverage is a trade that uses little real investment, while traders can buy large amounts of assets. In other words, these are trading opportunities that traders can invest in larger amounts than physical investments such as 1:10 1:100 1:1000, etc. This allows traders to make more profit when using real money to trade the market. Thus, leverage is very attractive to Forex traders.
Margin is the collateral that the trader places with the broker to open each order. The used collateral is very small and only 3% of the deposit can be used. Both leverage and margin are an important component of CFD trading, allowing traders to generate more profits with less capital.
CFD Trading Platform
Trading platforms need to be considered in more detail and choose the one that is suitable for each trader individually. For some traders, simplified platforms are suitable, for others, complex ones. Now most platforms use many functions and algorithms for trading, and also have different appearance and may vary, but do not worry, it takes only some time to get used to it.
It is absolutely necessary to trade on familiar and easy-to-use software. Traders may miss the price or, even worse, do false trading simply because the trading platform did not fit them. Trading buttons can be very understandable for some users. But if you are a trader who mistakenly finds himself in large trading, you must be sure that you have chosen a broker based on the clarity of the platform. Before you deposit real money into your account, you can always test the platform in demo mode.
Compare CFD Platforms
We collected the best brokers for comparison and described their pros and cons to make it easier to choose. You can look at platforms, spreads, pips and leverage in one place. Each online CFD broker also provides its own set of services and assets that you can trade in, so choose the one that has the best features and supports the markets in which you want to work. After checking these conditions, do not forget to look at the methods of depositing and withdrawing funds so that there are no further questions to the broker.
CFD Trading Costs
The broker, as a trading partner, not only sets the purchase and sale prices, but also finances the position in the underlying asset for the trader’s margin trading. To avoid further questions, the trader must pay the appropriate percentage while holding the position overnight in order to finance it. In addition to these interest rates, some brokers also bear transaction costs for CFD traders. The difference between the purchase and sale prices can also be included in the costs when comparing CFDs of trading instruments and stocks.
CFD Professional Support
CFD traders have many platforms and forums available for questions, problems, and general exchange on the Internet. There you can register for free and discuss with beginners and experts. Traders who regularly read there and engage in conversations provide a wider framework for their personal CFD trading. Some of the experts can also learn something from professionals.
CFD Regulation Brokers
Regulation of CFD brokers is a key factor for traders, because decency and further cooperation with the broker depend on it. Regulated brokers comply with all trading rules in accordance with applicable law. Which authority controls the broker depends largely on the location of the company. The best CFD brokers are regulated by the following bodies: NFA (United States), FCA (UK), BaFin (Germany), FINMA (Switzerland), AFM (Netherlands), CySEC (Cyprus), MFSA (Malta) and ASIC (Australia). You can go to the broker’s site and see at the bottom of the site who it is regulated by or go to a special page where the broker lists his achievements.