Understanding your goals is a big part of trading. Every trader wants to make a profit but not every trader has the same goals. As a trader, it is essential to create your own goals and make plans of how to get there.
Choosing a CFD broker that makes sense of these goals is a part of this plan. For example, trading CFDs with cryptocurrency will not be possible with Trade Nation since they do not offer cryptocurrency.
Below are the biggest factors that need to be considered when choosing a CFD broker.
1. Licenses and Regulation
The amount of trust in the platform is one of the biggest things to decide. When the platform has multiple licenses and is legally regulated then, it will also hold a higher level of trust from its clients. The software of the broker does not mean to be great but having regulations means that the money can be trusted in the platform. Generally, make sure that it is a secure environment.
2. Availability of Asset Classes
CFDs can be traded in different assets. The trader must make sure that he understands the trading assets whether it is stocks, cryptocurrencies, or forex. Choose a CFD broker that offers the desired asset. A lot of CFD brokers offer a lot of different asset classes. To diversify the portfolio and expand knowledge, work with multiple assets. Gaining more experience with different assets will make the trader flexible in their trading career.
3. Trading Fees
In any kind of trading, fees are very important. Paying too high fees is the last thing that the trader wanted to happen in their portfolio. Trading fees are unpreventable in some cases and the best way is to find a broker that is not having too high fees that will have much effect on the ability to have profitable trades.
There are no rules about what is an excessive fee and what is not. The important thing is that the trader should know how much he will be charged for a trade before executing it. This helps in seeing how much money is needed to make before fees to still make a profit from the trade after paying the fee.
Find a broker that offers the lowest fees to trade. Some platforms offer fixed fees in contrast to variable fees. Lastly, fees matter, and understanding the fee of the chosen platform is an excellent benefit in a trading career.
4. Trading Tools
Every broker offers a set of technical analysis tools that helps the traders in making trading decisions. Based on the way the resources are used, it brings a lot of stress in making the decisions. The greater the number of resources, the deeper the analysis in the charts.
There is also automated trading that is offered by some brokers to consider. For example, eToro provides a function to copy the trades of professionals. It does not guarantee success, but it can be beneficial since they make trades for you. It also reduces stress because it avoids making big-time decisions.
Furthermore, some CFD brokers offer educational resources such as tutorial videos or blog posts. It is good to work with a CFD broker that enhances knowledge.
5. Trading Signals
A trading signal is a real-time message that notifies a trader that the trade is showing the potential to be profitable. The trader then decides whether to take a part in the trade or not. It allows beginner traders to make professional-level trades. Although a trading signal is very tempting to follow without further considerations, it is not recommended. Trading signals are not always providing profitable trades.
Aside from trading signals, some brokers offer copy trading. It is a great way of automating trades without having a high level of stress from trading.
6. Customer Service
There will be glitches in the software from time to time and that is unavoidable. Even some of the biggest brokerages in the world experience technical difficulties sometimes. Make sure that the money is still safe when these things happen. Assurance is best confirmed with good customer service. Whether it is live chat through the platform or phone support, customer service is essential when trading CFDs or any kind of assets.