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Choosing the best CFD broker, or Contract is not an easy task. It’s one of the most important decisions you make, especially if you are an amateur trader who doesn’t have relevant experience in the market.
To make sure the choice you make sticks with you for a while, following we are naming a few qualities you should look for in a CFD when searching the market.
1. The Software
The software you are being offered is an important asset. A well-designed platform should make your trading experience easy, and present numerous opportunities to gain a profit. Traders feel comfortable in trading something they know about.
2. Assets
Once you made your mind about the broker, you need to check what tradable assets they offer. There are countless commodities from CFD to Forex. Therefore, you need to pick a platform that offers assets you have traded with before.
The most common commodities are oil and gold. A reliable broker understands this, and they provide CFDs for such assets. A reliable platform should offer a wide variety of CFDs to choose from even if the user isn’t acquainted with all the options.
3. Margin
The common margin with CFDs is 10%. However, it can be between 5-20% depending on several factors. The leverage in such cases is 10 to 1, and this should award you more profit. So do your research, and avoid CFD with unexplainably high margins. They want to rip you off.
4. Commission
The usual commission is 0.10-0.20% of the entire trade. They may demand a regular fee of $10 or more. Therefore, users should aim for bigger trades to control their loss. Try and see whether the CFD lets your negotiate the commission or not. If it does, it’s a very positive sign.
5. Authorization by FCA
The Financial Conduct Authority is responsible for overseeing the trade market and regulating it. Therefore, the CFD you choose must be authorized by FCA or else you are indulging in the illegal trade. Look for FCA regulations and register number.
The FCA regularly updates trading regulations, and a CFD platform has to change accordingly to survive. A platform that is being open about their FCA info is trustworthy and cares about the user. It shows the platform is legitimate and gives you proper marketing exposure.
6. Interest Based on Short and Long Positions
Brokers charge differently here. They have their own rates they operate with, and it is usually tied to overnight interest rate imposed by big banks (Short term). On the contrary, when it comes to long, the cut is 2-3% (more than the rate). This often victimizes short term as they end up with lower rates.
7. Customer Care
Financial Market is very competitive and often ends up surprising you. Therefore, you need a platform that shows consent and remains available whenever you need their assistance. So, check the availability of customer is representative when choosing a platform.
You need to check the variety and channels of communication offered by a Broker including email, phone, Whatsapp, Skype, etc.
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