CFDs or Contract For Differences are financial tools used to speculate about share markets, including commodities, shares, indices, and forex. And CFD trading refers to the buying and selling of these contracts. The amount of profit or loss an investor makes is highly dependent on how accurate their forecast about the market is. When one trades a CFD, they agree upon the terms that there will be a price difference of the asset from when a contract is opened and closed. Many trading companies are offering the service of CFD trader, specialising in CFD trading and brokerage. One should be very careful while looking for a broker as they are vital for making profits as investors do not have to own the assets; they make profits because of the price fluctuations and differences.
Down below are a few factors that will help one in choosing their broker.
- Reputation and Regulation
Reputed CFD brokers are licensed. In Australia, the Australian Securities and Investments Commission (AISC) regulates all of the CFD tradings. And traders will have their license number and other legal details on its website for potential clients to see.
A licensed CFD broker ensures that all parties involved follow the rules and regulations, adequate capitalisation, and regular checking and auditing. They also segregate customer trading funds into different accounts.
- Trading Platform and Software
Trading platforms act as portals for the investor. These platforms should be easy to navigate, and the software used must be attractive and user friendly. They should also have both technical and financial analysis tools for investor use. Most importantly, the investors should find it easy to operate shares without making any additional efforts to enter and exit them.
Usually, a trading platform has simple “buy”, “sell”, and “close all” or “exit” buttons which make trading a lot less confusing and complicated. If the designer has not done a good job with the interface, it may lead to mistakes such as accidentally trading a CFD and incurring a loss.
- Convenience
Many brokerage firms are offering both mobile and desktop platforms for trading. They are the best as they display real-time quotes and charting and provide the clients with various analytical tools, thereby offering a streamlined experience.
Some of these tools are economic calendars, drawing or mapping tools, financial news feed amongst others.
Mobile trading is essential these days as many people trade on the go. Hence having a fast, bug-free mobile app that is regularly updated is a bonus.
- Customer service
Any trading involves a considerable amount of money. Especially the CFD trader must be available on short notice as the prices can fluctuate at any time. Brokers should offer support on call or through text as it is easy to talk to a person. Brokers who provide on-call support, shorter wait time and those who can give expert advice are the most preferred.
- Choose a Company that Respect Your Privacy
Privacy of information and investor details should always be kept confidential. Many people associate trading with scams because of a few unscrupulous brokers who spread false information and leak personal information violating the investor’s privacy.
In conclusion, there are trading companies and brokers who offer transparent and professional services; investors have to look around a little before making any decisions!
