Is it true that a good and reputable CFD broker can help you obtain success in CFD trading? How do they affect your every trade? Trading CFDs has become popular thanks to its ease of access to different markets all across the globe.
However, no matter what you want to trade through CFD, it is very important to find a registered broker since thousands of illegal ones might offer you a good deal at one glance, but then next thing you know, your hard-earned money is all gone.
Checklist #1: Check For the Licensing and Regulation
You will be checking many things before you can make sure that the broker you are about to entrust your money to is worth the risk. But the first thing to check is the licensing and regulation of your potential broker. When you sign up for a licensed broker and someone regulated by your government’s regulatory commission gives you the feeling of assurance.
Different countries mandate different legislation requirements to be able to have a financial registration. Here are some of the regulatory bodies per country.
- UK – Financial Conduct Authority (FCA)
- Australia – Australian Securities and Investment Commission
- CySEC – Cyprus Securities and Exchange Commission (CySEC)
- New Zealand – Financial Markets Authority (FMA)
- Switzerland – Swiss Financial Market Supervisory Authority (FINMA)
- The United States – National Futures Association (NFA) and Commodity Futures Trading Commission (CFTC)
Checklist #2: Customer Support
Whenever you have queries, where should you ask if the CFD broker cannot respond to you as soon as possible? This is the reason why you need a broker who has very responsive and efficient customer support.
This will ensure that your struggles in the future will be addressed more correctly and fast. Good customer support needs to be round the clock available by phone, email, or live chat. It should also be available in multiple languages and should be available for technical and client support.
Checklist #3: Competitive Platform
You found a CFD broker who can respond to you as soon as you send your questions; however, the platform performance is very poor. That is still considered unfavorable. An easy-to-use platform promotes efficiency no matter if you are experienced or a new trader.
Aside from that, the platform should also offer tools for technical and fundamental analysis such as forex charting and indicators. A good platform also allows you to place your trades fast, with ease and security. Other factors to consider:
- The platform should offer low spreads
- It should have customizable add-ons
- The platform should offer a variety of trading instruments
- The platform should have risk management tools.
Checklist #4: Spreads
What are the available spreads on the platform? Though CFD trading don’t have a commission on the actual trades, they get their compensation through the spread, which is the difference between the entry and exit prices. So check the spreads offered by your broker. There are variable spread, fixed spread, or a combination of these two. Check if it suits your liking before your start trading CFDs.