How to choose CFD Broker?
Choosing the right CFD broker is essential to ensuring that you have a successful trading experience. If you are new to trading then it is especially tricky to know who best to place your trust in. Choosing the right broker will not only help you to learn more about CFDs, but will undoubtedly affect your financial future.
Listed below are some tips for how to choose a CFD broker:
- Ensure that the broker is authorised and regulated by the Financial Services Authority (FSA). A brokerage should display their FSA registration number on their website.
- Find out how much commission you are expected to pay. Does it seem a fair amount? If not, enquire as to why commission is higher than expected.
- Ask potential brokers what interest they charge on leveraged positions. This is crucial, as it is the rate you will be paying whenever you leave a position open overnight.
- Carefully read through the CFD broker’s terms and conditions associated with trading costs. Some brokers may run promotions on transaction fees which later revert back to a higher cost, usually when you have a position open.
- Research both the range of CFDs on offer and the US, UK and European markets and indices covered. Generally speaking, the wider the selection, the better.
- Enquire as to the processes for depositing money or withdrawing profits from an account. You do not want to experience cash flows difficulties at a later stage.
- Set up several demo accounts with different CFD brokerages to see which you prefer. This will give you a real feel for how each broker operates.
By following the guide above, you will know how to choose a CFD broker who you can place your trust in and trade successfully with.
Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.