Contracts for Difference (CFD) is a financial instrument that traders use to trade without owning the actual stocks. Since it’s popular among beginner and professional traders, many platforms and brokers offer CFDs. However, CFD trading platforms aren’t all the same, and each trader has their own needs and preferences.
So, before looking for the right CFD trading platform, you should first know the tools you need and other preferences. In this article, we’ll give you a list of the key features of the ideal CFD platform for a better trading experience.
1. Regulation and Security
When looking for a CFD trading platform, the first thing you should consider is whether it’s regulated by reputable financial authorities, and if it has great security. Besides, trading involves a huge amount of money, so you should verify the licences and other safety precautions before considering a platform.
Additionally, there are many ways to check whether a trading platform is regulated. For instance, in the UK, there’s the Financial Conduct Authority (FCA).
2. Easy Navigation
Another thing you should consider when looking for a CFD trading platform is its user-friendly interface. As a beginner, you should be able to easily navigate the platform to avoid any problems and issues.
In addition, CFD trading can be hard on its own, so it can be more stressful if you’re having a hard time navigating the platform.
3. Financial Instruments and Markets
Aside from offering CFDs, the trading platform should also include various financial markets, such as stocks, forex, and indices. Offering a wide range of financial markets allows traders to diversify their portfolios. In addition, if you’re planning to use CFD in various markets, you can do so without the need to look for another trading platform. At the same time, you get to encounter various trading opportunities.
4. Leverage and Margin Requirements
In CFD trading, there’s leverage in which traders are allowed to open positions without investing in the actual amount of an underlying asset. In addition, there’s the margin requirement that’s the minimum amount required to maintain your trading account. However, different trading platforms require different leverage levels and margin requirements. So, ensure to check them first.
Meanwhile, you should be careful when utilising leverage. Although it can magnify your gains, it can also magnify your losses.
5. Trading Costs
Aside from the actual cost of opening trades, there are other fees you should pay, including commissions, and spreads. Similar to leverage, the amount of fees depends on the trading platform. In some cases, you don’t need to pay for commission, but the spreads are wider. On the other hand, some platforms ask for commission, yet the spreads are tighter.
6. Speed and Reliability
Is the speed of the CFD trading platform fast and reliable enough when executing trades? Whether a trading platform is well-known or not, you should still try to execute trades using a demo account first before considering trading with them for real. Since demo accounts also have the same results as the actual trades, it can help you decide whether you can execute trades well without worries.
7. Charting Tools and Technical Indicators
Charting tools and technical indicators can significantly help traders to have a great trading experience. Charting tools allow you to customise your charts in a way that you can easily understand what’s going on. Meanwhile, technical indicators can help you make informed decisions, especially in times when you need to decide right away.
8. Mobile and Desktop Access
As the trading industry evolves, your CFD trading platform should also be advanced enough that you can access your trades on various devices, such as desktops and mobile phones. Besides, if you’re able to access your trades on various devices, it means that the platform can also provide software updates and real-time information.
Moreover, if you can access your trades anytime, anywhere, you can also make necessary updates and changes depending on the current market trends.
9. Customer Support
Customer support is one of the essentials in CFD trading and even other kind of trading. If the trading platform offers customer support 24/7, every day, you won’t have to worry whenever you encounter a glitch or any other problems while trading.
In addition, customer support should be available in various channels, including chat, phone, and email.
10. Educational Resources and Demo Account
Educational resources should also be offered in the trading platform, especially if you’re a beginner. They should offer webinars and other references to improve your knowledge about the trading platform and various financial markets.
In addition, traders should also have access to a demo account. It allows traders to navigate the trading platform without the need to use their trading capital. And when they do, they can easily know whether the platform is easy to navigate, and can satisfy their trading needs and preferences.
Final Thoughts
Choosing the right CFD trading platform can be overwhelming at first, especially for beginners. By considering the key features listed in this article, you can find the right trading platform that fits your needs and preferences as a trader.
