Author: Jacob Bailey
Market Analyst
Jacob Bailey

CFD Trading Brokers

CFD Trading

CFD trading is hugely popular because of the tax benefits but also extremely high profits.

Also known as "Contract For Difference" trading, this is a form of derivative trading. The extensive choice of markets available make it an excellent choice. Choose to trade in currencies, commodities, stocks and indices. The money is made based on the difference in price of the asset, between when you bought it and then sold it.

In this article, you will learn:

  • What CFD trading is and how it works
  • The main broker benefits and features
  • How to maximise your CFD trading profit

Recommended forex Websites Updated: February 2019

Risk Warning / Ad Disclosure

Risk Warning: The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never trade money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain from referring new customers.

The Best CFD Brokers

In order to make trades you need to ensure they you are trading on a reliable platform with a good broker. There is much to consider when choosing a broker. Some of these factors are:

Diversity of Markets

If you look at the number of Forex trading pairs, commodities, indices and stocks that you could choose to trade in there are literally thousands. What you want is the option to choose which of these markets you want to trade. Choosing a broker that offers a wide selection means that you have much more choice. Make sure that you check what is available before you open an account. If you want to trade non fiat currency markets check out Cryptocurrency trading.

Mobile Trading

For many, time is a valuable commodity. No longer do people have the time to be sat in front of a computer at a desk all day. They need the flexibility to be able to trade on the move. That is why having a good mobile offering is critical. If the broker doesn't have an app then they should at least have an intuitive, mobile friendly website that enables you to trade from any device.

Licensing And Regulation

One of the biggest concerns for many is whether the broker is reliable and whether your money is safe. Of course, if you are going to be investing your cash then you must be confident that it is safe. By choosing a licensed or regulated broker with a good reputation you can trade safe in the knowledge that your money isn't going to disappear. There are many regulatory bodies to look out for and these vary between countries.

Good Customer Service

If you have a question or an issue while trading then you want to know that you can pick up the phone or start a live chat with someone that can help. All too often companies let themselves down by being inaccessible. Make sure that you choose a broker that offers good customer service. Often a live chat box will pop up when you land on the website. Ask a question and see how long it takes to get a response.

Todays Top Traders
Trader Broker Asset Profit

How Do CFD's Work

CFD or Contract For Difference trading requires you to predict the rise or fall of various markets; Forex, commodities, stocks and indices. You don't actually purchase the asset, instead you enter a contract between you and the broker. Let's say you want to trade on the outcome of the UK FTSE 100 and you expect it to rise. You enter the contract at the current price of the FTSE 100 and then when you are ready to exit the difference in price (the spread) is what you get paid on.

You can buy multiple contracts which then multiplies the spread by the number of contracts you buy. This is your profit. If the price falls though, the loss can be greater than the deposit so it is important that you know what you are doing. Let's look at an example:

You place a buy trade which means that you are predicting a rise. The buy trade you choose to enter is five CFDs on the FTSE 100. You enter when the price is $7,000 and exit when it is $7,050. The profit is multiplied by the number of contracts that you purchased, in this case five. The spread is $50 therefore your total profit is $250. Remember though that if the price falls you will lose the value of five times the points it fell by.

Forex Site Reviews
  • Binarycent Logo
  • Raceoption Logo
  • Pocket Option Logo
  • Olymp Trade Logo

Bonuses And Offers

Across the financial trading markets, brokers offer welcome bonuses and other incentives to encourage you to trade with them and to stay trading. CFD trading is no different and you will find a variety of welcome no deposit and deposit bonuses designed to win your business:

  • Welcome no deposit bonus - Usually between $25 to $50 which allows you to get to grips with the platform
  • Deposit bonus - Whether you are opening an account or making a further deposit, the deposit bonus offers a percentage of the deposit that you make
  • Match deposit bonus - Not always a welcome bonus, usually a bonus for re-depositing funds
  • First trade bonus - One particular broker offers a bonus of up to a value of $120 to put towards your first trade

While there are bonuses to be had, they aren't as widely advertised as perhaps binary and Forex bonuses however they are still available. One particular bonus is the "first trade bonus" where you can get up to $120 to make your first trade with no deposit required.

Please note that there are stipulations for withdrawing these bonuses. You cannot just receive the bonus and withdraw all of your funds. A bonus must be traded a certain number of times before it can be withdrawn. You will also need to use the bonus within a certain period of time and, if it is a no deposit bonus, you will be required to deposit real funds and start trading before the bonus becomes eligible for withdrawal. With the "first trade bonus" you have no choice but to trade the bonus anyway but if you win then you will still be required to carry on trading before you can withdraw.

The extensive choice of markets available to trade, make it an excellent choice.

We've Found The Top Sites

We founded this service with a mission to bring only the best brokers to you. To save you hours and hours trawling the web researching all of the various brokers, we do the hard work for you. Our team are a mixture of experienced traders and financial experts all with extensive experience in the online trading world. From binary options to Forex trading and Cryptocurrency markets, we have the knowledge and experience to ensure that we can spot the good from the not so good.

In order to ensure that the information that we provide is accurate we trade with each broker examining all aspects of trading and how that broker scores. From the ease of use and mobile access of the platform to the bonuses offered, we then rate and review each broker on each feature.

We don't limit what we do to just one country. We review brokers and trading conditions from all across the globe and continually update our information to ensure that it is accurate and relevant. We share this information with you in the form of comprehensive reviews. We don't put our name to anything that we are not 100% confident with. All you need to do is then choose the perfect broker for you.

Risk Warning / Ad Disclosure

Risk Warning: The trading products offered by the companies listed on this website carry a high level of risk and can result in the loss of all your funds. You should never trade money that you cannot afford to lose.

Ad Disclosure: Some of the links that you will find on this website are advertisements for which we do receive financial gain from referring new customers.

Frequently Asked Questions

CFD FAQ

Is CFD trading legal, regulated and safe?

Yes, in most countries CFD trading is legal. We only bring you the best brokers that are regulated by the financial bodies of their respective countries.

Can I trade without downloading software?

Yes, there are a few brokers that insist on a software download but mostly you can just open an account and start trading.

Do I need to start trading with real money?

No, many brokers offer a welcome bonus, the bonus can then be used to trade before you risk your own money. Alternatively you can practise on a virtual platform by signing up to a free demo account.

How can I make deposits and withdrawals?

Making a deposit is simple. Sign up to an account, select the amount you want to deposit and then pay using an accepted payment method. When you request a withdrawal, the money is returned to the original source.

What is a CFD broker welcome bonus?

A CFD welcome bonus is basically free cash to trade with. Some brokers offer a deposit bonus which is either a percentage of your deposit or a 100% match bonus.

Meet The Author
Jacob Bailey
Jacob Bailey
Market Analyst

Jacob has been an author for Binary Options Expert since our launch in 2012. He has over 40 years’ experience in the financial sector and has held a variety of positions within financial services corporations and venture capitalist organisations. Learn more.

Related Pages