Cfd trading platform

Our website is free for our visitors, but in order to provide this free service we may be compensated, receive commissions or advertising fees from brokers listed on our website.

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CFD and Forex Trading, cfd trading platform.

Unlike many other financial products, you can decide beforehand how much money you want to risk losing at most.

CFD and forex trading

Compare forex and CFD brokers

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Free demo accounts

With a demo account you can get familiar with trading in cfds and forex for free.
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What is leverage?

A CFD enables you to trade an asset by paying just a small fraction of the total price.
More on leverage

Trade in commodities

An easy way to go long or short on gold, silver, oil.
More on commodities

Forex trading

Speculate on the foreign exchange market 24 hours a day.
More on forex

Stock trading

Thanks to cfds you can trade in stocks with a limited investment.
More on stocks

What are cfds?

A CFD (contract for difference) is a financial product which "imitates" the behavior of another called "underlying asset".

This underlying asset can be a share, oil, gold or any other asset from any financial market.

It is a contract between you and your broker since you will never physically own the product you bought or sold.

However if the price of a CFD you bought rises, you'll earn money and if it falls you'll take a loss.

A CFD is much cheaper than the price of the underlying asset. This feature makes it more accessible to trade with.

When trading with cfds, you will have to pay a small fee called "spread".

With cfds, you can speculate on rising or falling prices of stocks, indices, forex or commodities!

Thanks to a free demo you can get acquainted with cfds on shares, indices and raw materials. Apply for a free demo of the trading platform at one of the brokers we have selected.

After that, you can switch to a real account and add money to your account with a bank transfer or a credit card, among others, so that you can always quickly get down to work on the market.

Trading with a leverage effect

Thanks to cfds you can enjoy a leverage effect, just like you know from other products like options. But cfds don't expire and don't lose value over time.

Unlike many other financial products, you can decide beforehand how much money you want to risk losing at most.

You can do this by placing a stop loss for each position. You should preferably choose a guaranteed stop.

To protect the trader, at european regulated brokers such as plus500, fortrade and markets, positions are automatically stopped out as soon as the margin is used up: your account will never go below zero.

Long and short

With cfds, you can easily go long and speculate on rising prices, but it's also possible to open short positions, so you'll win money when prices are falling.

With cfds it really doesn't matter if the market is rising or falling, you can profit from both these moves, up or down.

CFD trading: low costs

On the CFD and forex platforms, you trade with very competitive spreads.

You don't pay any commissions with most of the brokers: the trading costs are covered by the bid/ask spread and by the premium, you pay if you keep the position open for more than one day.

On a yearly basis, the interest over this amounts to only a small percentage.

More about cfds

On the CFD's and leverage effect page you can learn more about how the leverage works and how you can control it.

Be sure not to use the highest leverage available!

Open an account

Compare the CFD platforms and try the free demos or open an account right away.

With an account, you can trade cfds on shares, indices, commodities (oil, gold, silver, platinum, etc.) and on the forex market (currencies).

With the free demo, you can practice with a fictitious capital so that you learn how to trade with cfds and familiarize yourself with the platform from the brokers we selected.

Cfds are leveraged products and trading with leverage can result in the loss of your entire deposit. Trading cfds or forex may not be suitable for you, so make sure you understand all the risks.

Trading cfds carries considerable risk of capital loss. Cfds are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading cfds. You should consider whether you can afford to take the high risk of losing your money.

Our website is free for our visitors, but in order to provide this free service we may be compensated, receive commissions or advertising fees from brokers listed on our website.

Cfd-tradingplatform.Com is a website with information about trading forex and cfds.

Cfd-tradingplatform.Com does not give personal advice. For personalized information, you should contact your investment advisor.

There are numerous CFD and forex brokers and trading platforms, it's not always easy to make a good comparison. On this website you'll find some information about a couple of trading platform. Trading in cfds and forex always means the broker is your counterparty, so it's good to work with more than one broker in order to limit the counterparty risk.

An introduction to contract for differences (cfds)

A contract for difference (CFD) is a contract between a buyer and a seller that stipulates that the buyer must pay the seller the difference between the current value of an asset and its value at contract time. Cfds allow traders and investors an opportunity to profit from price movement without owning the underlying assets. The value of a CFD contract does not consider the asset's underlying value: only the price change between the trade entry and exit.

This is accomplished through a contract between client and broker and does not utilize any stock, forex, commodity, or futures exchange. Trading cfds offers several major advantages that have increased the instruments' enormous popularity in the past decade.

Key takeaways

A contract for differences (CFD) is an agreement between an investor and a CFD broker to exchange the difference in the value of a financial product between the time the contract opens and closes.

A CFD investor never actually owns the underlying asset but instead receives revenue based on the price change of that asset.

Some advantages of cfds include access to the underlying asset at a lower cost than buying the asset outright, ease of execution, and the ability to go long or short.

A disadvantage of cfds is the immediate decrease of the investor's initial position, which is reduced by the size of the spread upon entering the CFD.

Other CFD risks include weak industry regulation, potential lack of liquidity, and the need to maintain an adequate margin.

Contract for differences (CFD)

How cfds work

A contract for differences (CFD) is an agreement between an investor and a CFD broker to exchange the difference in the value of a financial product (securities or derivatives) between the time the contract opens and closes.

It is an advanced trading strategy that is utilized by experienced traders only. There is no delivery of physical goods or securities with cfds. A CFD investor never actually owns the underlying asset but instead receives revenue based on the price change of that asset. For example, instead of buying or selling physical gold, a trader can simply speculate on whether the price of gold will go up or down.

Essentially, investors can use cfds to make bets about whether or not the price of the underlying asset or security will rise or fall. Traders can bet on either upward or downward movement. If the trader that has purchased a CFD sees the asset's price increase, they will offer their holding for sale. The net difference between the purchase price and the sale price are netted together. The net difference representing the gain from the trades is settled through the investor's brokerage account.

On the other hand, if the trader believes that the asset's value will decline, an opening sell position can be placed. In order to close the position, the trader must purchase an offsetting trade. Then, the net difference of the loss is cash-settled through their account.

Countries where you can trade cfds

CFD contracts are not allowed in the U.S. They are allowed in listed, over-the-counter (OTC) markets in many major trading countries, including the united kingdom, germany, switzerland, singapore, spain, france, south africa, canada, new zealand, hong kong, sweden, norway, italy, thailand, belgium, denmark, and the netherlands.

As for australia, where CFD contracts are currently allowed, the australian securities and investment commission (ASIC) has announced some changes in the issue and distribution of cfds to retail clients. ASIC’s goal is to strengthen consumer protections by reducing CFD leverage available to retail clients and by targeting CFD product features and sales practices that amplify retail clients’ CFD losses. ASIC’s product intervention order will be effective on march 29, 2021.

The U.S. Securities and exchange commission (SEC) has restricted the trading of cfds in the U.S., but non-residents can trade using them.

Fast fact

CFD trading is surging in 2020; the increase in popularity may be because of covid-19-induced volatility in the markets. A key feature of cfds is that they allow you to trade on markets that are heading downwards, in addition to those that are heading up—allowing them to deliver profit even when the market is in turmoil.

The costs of cfds

The costs of trading cfds include a commission (in some cases), a financing cost (in certain situations), and the spread—the difference between the bid price (purchase price) and the offer price at the time you trade.

There is usually no commission for trading forex pairs and commodities. However, brokers typically charge a commission for stocks. For example, the broker CMC markets, a U.K.-based financial services company, charges commissions that start from 10%, or $0.02 cents per share for U.S. And canadian-listed shares. The opening and closing trades constitute two separate trades, and therefore you are charged a commission for each trade.

A financing charge may apply if you take a long position; this is because overnight positions for a product are considered an investment (and the provider has lent the trader money to buy the asset). Traders are usually charged an interest charge on each of the days they hold the position.

For example, suppose that a trader wants to buy cfds for the share price of glaxosmithkline. The trader places a £10,000 trade. The current price of glaxosmithkline is £23.50. The trader expects that the share price will increase to £24.80 per share. The bid-offer spread is 23.48-23.50.

The trader will pay a 0.1% commission on opening the position and another 0.1% when the position is closed. For a long position, the trader will be charged a financing charge overnight (normally the LIBOR interest rate plus 2.5%).

The trader buys 426 contracts at £23.48 per share, so their trading position is £10,002.48. Suppose that the share price of glaxosmithkline increases to £24.80 in 16 days. The initial value of the trade is £10,002.48 but the final value is £10,564.80.

The trader's profit (before charges and commission) is: £10,564.80 – £10,002.48 = £562.32.

Since the commission is 0.1%, upon opening the position the trader pays £10. Suppose that interest charges are 7.5%, which must be paid on each of the 16 days that the trader holds the position. (426 x £23.48 x 0.075/365 = £2.06. Since the position is open for 16 days, the total charge is 16 x £2.06 = £32.89.)

When the position is closed, the trader must pay another 0.01% commission fee of £10.

The trader's net profit is equal to profits minus charges: 526.32 (profit) – 10 (commission) – 32.89 (interest) – 10 (commission)= £473.43 (net profit).

Advantages of cfds

Higher leverage

Cfds provide higher leverage than traditional trading. standard leverage in the CFD market is subject to regulation. It once was as low as a 2% maintenance margin (50:1 leverage), but is now limited in a range of 3% (30:1 leverage) and could go up to 50% (2:1 leverage). Lower margin requirements mean less capital outlay for the trader and greater potential returns. However, increased leverage can also magnify a trader's losses.

Global market access from one platform

Many CFD brokers offer products in all the world's major markets, allowing around-the-clock access. Investors can trade cfds on a wide range of worldwide markets.

No shorting rules or borrowing stock

Certain markets have rules that prohibit shorting, require the trader to borrow the instrument before selling short, or have different margin requirements for short and long positions. CFD instruments can be shorted at any time without borrowing costs because the trader doesn't own the underlying asset.

Professional execution with no fees

CFD brokers offer many of the same order types as traditional brokers including stops, limits, and contingent orders, such as "one cancels the other" and "if done." some brokers offering guaranteed stops will charge a fee for the service or recoup costs in another way.

Brokers make money when the trader pays the spread. Occasionally, they charge commissions or fees. To buy, a trader must pay the ask price, and to sell/short, the trader must pay the bid price. This spread may be small or large depending on the volatility of the underlying asset; fixed spreads are often available.

No day trading requirements

Certain markets require minimum amounts of capital to day trade or place limits on the number of day trades that can be made within certain accounts. The CFD market is not bound by these restrictions, and all account holders can day trade if they wish. Accounts can often be opened for as little as $1,000, although $2,000 and $5,000 are common minimum deposit requirements.

Variety of trading opportunities

Brokers currently offer stock, index, treasury, currency, sector, and commodity cfds. This enables speculators interested in diverse financial vehicles to trade cfds as an alternative to exchanges.

Disadvantages of cfds

Traders pay the spread

While cfds offer an attractive alternative to traditional markets, they also present potential pitfalls. For one, having to pay the spread on entries and exits eliminates the potential to profit from small moves. The spread also decreases winning trades by a small amount compared to the underlying security and will increase losses by a small amount. So, while traditional markets expose the trader to fees, regulations, commissions, and higher capital requirements, cfds trim traders' profits through spread costs.

Weak industry regulation

The CFD industry is not highly regulated. A CFD broker's credibility is based on reputation, longevity, and financial position rather than government standing or liquidity. There are excellent CFD brokers, but it's important to investigate a broker's background before opening an account.

Risks

CFD trading is fast-moving and requires close monitoring. As a result, traders should be aware of the significant risks when trading cfds. There are liquidity risks and margins you need to maintain; if you cannot cover reductions in values, your provider may close your position, and you'll have to meet the loss no matter what subsequently happens to the underlying asset.

Leverage risks expose you to greater potential profits but also greater potential losses. While stop-loss limits are available from many CFD providers, they can't guarantee you won't suffer losses, especially if there's a market closure or a sharp price movement. Execution risks also may occur due to lags in trades.

Because the industry is not regulated and there are significant risks involved, cfds are banned in the U.S. By the securities and exchange commission (SEC).

Example of a CFD trade

Suppose that a stock has an ask price of $25.26 and the trader buys 100 shares. The cost of the transaction is $2,526 (plus any commission and fees). This trade requires at least $1,263 in free cash at a traditional broker in a 50% margin account, while a CFD broker requires just a 5% margin, or $126.30.

A CFD trade will show a loss equal to the size of the spread at the time of the transaction. If the spread is $0.05 cents, the stock needs to gain $0.05 cents for the position to hit the break-even price. While you'll see a $0.05 gain if you owned the stock outright, you would have also paid a commission and incurred a larger capital outlay.

If the stock rallies to a bid price of $25.76 in a traditional broker account, it can be sold for a $50 gain or $50 / $1,263 = 3.95% profit. However, when the national exchange reaches this price, the CFD bid price may only be $25.74. The CFD profit will be lower because the trader must exit at the bid price and the spread is larger than on the regular market.

In this example, the CFD trader earns an estimated $48 or $48 / $126.30 = 38% return on investment. The CFD broker may also require the trader to buy at a higher initial price, $25.28 for example. Even so, the $46 to $48 earned on the CFD trade denotes a net profit, while the $50 profit from owning the stock outright doesn't include commissions or other fees. Thus, the CFD trader ends up with more money in their pocket.

Cfds faqs

What are cfds?

Contracts for differences (cfds) are contracts between investors and financial institutions in which investors take a position on the future value of an asset. The difference between the open and closing trade prices are cash-settled. There is no physical delivery of goods or securities; a client and the broker exchange the difference in the initial price of the trade and its value when the trade is unwound or reversed.

How do cfds work?

A contract for difference (CFD) allows traders to speculate on the future market movements of an underlying asset, without actually owning or taking physical delivery of the underlying asset. Cfds are available for a range of underlying assets, such as shares, commodities, and foreign exchange. A CFD involves two trades. The first trade creates the open position, which is later closed out through a reverse trade with the CFD provider at a different price.

If the first trade is a buy or long position, the second trade (which closes the open position) is a sell. If the opening trade was a sell or short position, the closing trade is a buy.

The net profit of the trader is the price difference between the opening trade and the closing-out trade (less any commission or interest).

Why are cfds illegal in the U.S.?

Part of the reason that cfds are illegal in the U.S. Is that they are an over-the-counter (OTC) product, which means that they don't pass through regulated exchanges. Using leverage also allows for the possibility of larger losses and is a concern for regulators.

The commodity futures trading commission (CFTC) and the securities and exchange commission (SEC) prohibit residents and citizens of the U.S. From opening CFD accounts on domestic or foreign platforms.

Is trading cfds safe?

Trading cfds can be risky, and the potential advantages of them can sometimes overshadow the associated counterparty risk, market risk, client money risk, and liquidity risk. CFD trading can also be considered risky as a result of other factors, including poor industry regulation, potential lack of liquidity, and the need to maintain an adequate margin due to leveraged losses.

Can you make money with cfds?

Yes, of course, it is possible to make money trading cfds. However, trading cfds is a risky strategy relative to other forms of trading. Most successful CFD traders are veteran traders with a wealth of experience and tactical acumen.

The bottom line

Advantages to CFD trading include lower margin requirements, easy access to global markets, no shorting or day trading rules, and little or no fees. However, high leverage magnifies losses when they occur, and having to pay a spread to enter and exit positions can be costly when large price movements do not occur. Indeed, the european securities and markets authority (ESMA) has placed restrictions on cfds to protect retail investors.

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Reach beyond boundaries and limits

Expand your market knowledge with the massive choice of educational materials. Whether you are new to trading or have passed some harsh trials of the market – you still can find exciting materials on cfds, investment options, and best trading practices. Numerous tutorials, online courses, vods, articles, and e-books are by your side in full access for free. Break the boundaries of own practices by reaching out to the new heights.

Reach beyond boundaries and limits

Design your individual trading experience

Intuitive interface, flexible customization for variety of assets, market and pending orders, advanced secured experience, execute trades in one click or use stop loss / take profit and trailing stop – these are just a few features of tradeatf trading platform that allows you to design the transparency, consistency, and individuality of your trading style. All you need is internet connection and the desire to hit the burning hot market assets.

Design your individual trading experience

All the best trading opportunities at your feet

Opt-in for the best investment options. Upgrade your portfolio by trading cfds on more than 250 assets. Enjoy zero fees and commissions, full 24/5 support, news alerts, and a functional demo training account by your side.

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Risk warning:
trading forex and CFD's carries a high level of risk to your capital. The trading may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary taking into account your investment objectives and level of experience. You should not risk more than you are prepared to lose. Please ensure you read through our terms and conditions of use carefully before making CFD's/forex investments. To read our full risk disclosure click here.

Tradeatf provides its services exclusively in the territories in which it is licensed.

CFD trading platforms

As a newbie trader, contracts for difference can be somewhat overwhelming. These seemingly complex financial instruments can be better understood by using the right CFD trading platform. Oftentimes, a CFD broker will use include a customizable user interface on an existing CFD trading platform such as metatrader 4 or metatrader 5. Many CFD brokerages provide their traders with a wide variety of CFD trading platforms to choose from. Whether it is a proprietary trading platform, or a blended platform, there are many options available to clients. For example, trading platforms such as metatrader 4 often allow a free download of the CFD trading platform for clients.

Regardless, it is important that the CFD trading platform is user-friendly, efficient, and up-to-date. The characteristics of effective CFD trading platforms include full account management capabilities, order cancellation, order entry, and a wide range of market analysis tools. The best CFD trading platforms provide traders with all of the above characteristics, including real-time quotes on financial instruments. Traders should be able to implement transactions and enter orders quickly and easily. The two most popular CFD trading platforms available to clients today are metatrader 4 (MT4) and metatrader 5 (MT5). These platforms offer a full range of features, market access and market information.

Metatrader 4 (MT4) trading platform

As far as CFD trading platforms go, MT4 is the undisputed king. As the gold standard in CFD trading, metatrader 4 has been widely adopted by brokers around the world. It is not the lack of alternatives that makes MT4 so popular; it’s the functionality, advanced technology, technical and fundamental analysis, and security features that are deserving of praise. Clients can easily open positions, close positions, and enjoy uninterrupted trading on a secure platform – that is the MT4 promise. CFD trading is inherently volatile, and to function effectively in such an environment a sophisticated and stable trading platform is required. It is ideally suited to novice traders and experienced traders alike, yet another example of its adaptability to the individual client. MT4 also uses highly sophisticated MQL programming language to offer maximum functionality, efficiency and security.

MT4 is also available in multiple languages, bolstering its appeal to traders around the world. Perhaps its most useful feature is charting. Charting functionality allows traders to analyze technical aspects of the market while conducting trades on a wide range of assets. EA’s (expert advisors) are yet another feature of metatrader 4 that is deserving of praise. Brokers can communicate easily with clients on MT4, using real-time communication channels. There is no need for complex threads of emails, making the trading experience so much easier. As for its PC requirements, MT4 uses very few resources. As such, it is unlikely to cause disruptions to the functionality of your desktop, smartphone, or laptop. With less resource intensive requirements, MT4 operates smoothly and efficiently across the board. Security is always a primary concern on trading platforms, and MT4 uses the highest security encryption protocols in the industry. 129-bit key encryption is used and the client’s IP address is masked at all times. Since MT4 allows for customization according to the broker’s needs, it is possible to add a personal touch from the brokerage’s perspective.

Metatrader 5 (MT5)

CFD traders now have another metatrader option in the form of MT5. This is the latest operating version of the software from the world’s most renowned CFD trading platform provider. Multi-account usage is now possible with MT5, and management is certainly made easier with this option. Thanks to the navigator, it is much easier to move between different accounts and to adopt different strategies. As always, metatrader 5 offers a user-friendly interface and no delays in trade execution, navigation, and functionality. Scalping and carry trades are possible, and switching between different categories is much easier with MT 5. As a regular trader of cfds (stocks, indices, commodities, and forex) it is much easier to switch between categories and respond to market volatility. The time-saving aspect of MT5 CFD trading is certainly appreciated.

Other useful tools available with metatrader 5 include custom indicators such as bill williams, oscillators, volumes, and trends. Analytical tools can also be classified according to preferences, simplifying the process accordingly. New trend indicators such as triple exponential moving averages (TRIX), double exponential moving averages (demas) and adaptive moving averages (amas) are available. In terms of CFD trading platforms, the accuracy inherent in MT5 makes it a top contender for best CFD trading software on the market. Metatrader 5 features 7 new indicators, including 5 trend indicators. The expert advisors and trading script on the MT5 platform is ideally suited for automated trading. The condensed programming language offers greater efficiency and user-friendliness.

Mobile app trading platforms

The majority of traders today have switched to mobile trading as their preferred medium. Mobile trading with MT4 and MT5 is entirely possible. Mobile trading apps can be downloaded from the CFD broker for tablet, smartphone or phablet access. Once the mobile trading platform is up and running, traders will have access to a wide range of trading opportunities, anytime, anywhere in a regulated jurisdiction. Mobile trading allows for easy buying and selling, even editing of orders by simply accessing real-time prices on the go. A wide range of charting features is available including technical analysis capabilities such as pivot points, arcs, trendlines and market visualization. Mobile trading also allows for charting features for ipad and iphone, and customized notifications for stop losses, take profits and price alerts.

CFD trading

What are cfds

CFD stands for Contract For Difference. This type of financial instrument allows you to trade an underlying index, share or commodity contract without actually having to own it. The CFD price is the price of the underlying asset. So if the price of the underlying asset, eg. Gold or facebook stock goes up, so will the price of the CFD. Similarly, if the price of the underlying asset goes down, so will the price of the CFD. It is important to emphasize that you don’t actually own the asset you trade.

Avatrade is a pioneering broker – we were one of the first online brokers to offer CFD trading, giving individual traders access to a large range of markets which were not accessible to them before.

Open a CFD trading account today and enjoy the benefits of an internationally regulated broker!

Why trade with avatrade?

Trade with confidence – avatrade is an internationally regulated broker with dedicated trading websites. We have 7 regulations, across 6 continents.

Large variety of CFD instruments – trade commodities, indices, etfs, stocks, bonds and cryptocurrencies like bitcoin and ethereum cfds.

Powerful platforms – manage your trades manually via MT4/MT5 and webtrader, or use our automated trading platforms.

Leveraged trading – use leverage on various cfds to amplify your exposure to the markets.

Master your trading skills – expand your horizons by making the most of our educational materials & daily updates.

Best in class customer service – multilingual live support with a dedicated account manager.

What is CFD trading?

CFD trading is quite similar to forex trading. When trading on the platform, you select the instrument you wish to trade and enter your order. If you think the price of a certain instrument, e.G. Crude oil, will increase, you’ll want to BUY the crude oil CFD. The same goes the other way – if you predict the value will go down, you short sell the CFD.

Naturally, as with any type of trade or investment, wrong predictions can lead to the loss of money, and one should be aware of the risks involved in CFD trading before starting out. There is plenty more to learn about CFD trading, and you can browse through our education section, to watch video tutorials, read articles, get news updates, and more. You can find more information on cfds and their advantages here.

How to trade cfds with avatrade

Trading platforms

Avatrade offers a variety of trading platforms, for both manual as well as automated trading. We supply a range of useful tools like the exclusive avaprotect feature, which can help elevate your trading. We have a variety of platforms made for desktop, web and mobile too. We also offer you the option of opening a demo-account, so you can practice trading before you start trading with your own money.

Leveraged trading

Leverage is a facility offered by some brokers which enables traders to hold trading positions that are larger than what one’s own capital would otherwise allow.

It is important to remember that the profits and losses are determined by the position size, and as leverage trading can magnify profits, it can also heighten losses.

Open a CFD trading account today and enjoy the benefits of an internationally regulated broker!

How much will it cost to trade cfds?

Avatrade does not charge any exchange fees or commission and offers tight spreads on open positions. The spread is the difference between the BUY and SELL prices of a certain instrument. When calculating the cost for a position, you need to multiply the spread by the size of the position. For example, if the spread for crude oil trading is $0.03 USD, the cost for opening a 10 barrel-position is $0.03 X 10 barrels = $0.3 USD.
Most of the CFD instruments are traded on market spreads, which means that the spreads are affected by the liquidity of the market. The more liquidity, the narrower the spread will get.

You can review the levels of leverage and spreads for all CFD instruments on our trading conditions & charges page.

CFD contract rollover

Each index and commodity CFD is based on a contract defining its rates, charges, etc. Each of these specific CFD contracts has an expiry date, which is the date that the contract expires and automatically replaced by a new contract, just like the real market. In order not to disturb traders during market hours, the contract rollover takes place over the weekend.

For more information, you are welcome to visit our CFD rollover page.

Start trading cfds with avatrade

If you think you know which way the markets will go and you want to start trading – it’s time to join avatrade and enjoy the best CFD trading experience!

Still not sure? Take a look at the avatrade reviews by our clients!

Register for a trading account now to enter the markets, or try our risk-free demo account.

Will old tricks work for the economy in 2021?

Cast around companies’ earnings reports and our education center for insights.

Together we rise

YOUR INVESTMENT GOALS MADE EASY

BITCOIN VS. ETHEREUM

Participate in the dynamics of foreign currencies with available cfds on crypto.

SILVER VS. GOLD

Participate in the dynamics of foreign currencies with available cfds on commodites.

AMAZON VS. FACEBOOK

Participate in the dynamics of foreign currencies with available cfds on stocks.

NASDAQ100 VS. ASX200

Participate in the dynamics of foreign currencies with available cfds on indices.

USD vs. AUD

Participate in the dynamics of foreign currencies with available cfds on forex.

Reach beyond boundaries and limits

Design your individual trading experience

All the best trading opportunities at your feet

Ready to join?

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HIGH RISK WARNING:
trading foreign exchange (forex) and contracts for differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

CFD trading 2021 – tutorial and brokers

Day trading with cfds is a popular strategy. The leverage and costs of CFD trading make it a viable option for active traders and intraday trades. This page provides an introductory guide, plus tips and strategy for using cfds. We also list the best CFD brokers in 2021.

Top 3 CFD brokers in ukraine

What is A CFD?

A CFD is a contract between two parties. They agree to pay the difference between the opening price and closing price of a particular market or asset. It is therefore a way to speculate on price movement, without owning the actual asset.

The performance of the CFD reflects the underlying asset. Profit and loss are established when that underlying asset value shifts in relation to the position of the opening price.

When trading cfds with a broker, you do not own the asset being traded. You are speculating on the price movement, up or down.

CFD example

Let us run through an example of a ‘contract for difference’ (CFD). Say you select a stock with an ask price of $25 and you open a CFD to the value of 100 shares.

If buying shares the traditional way, the cost would be $2,500. There might also be commission or trading costs.

However, a CFD broker will often require just a 5% margin. This will allow you to enter the same trade but with only $125. (actual levels of leverage or margin will vary). This makes it an attractive hunting ground for the intraday trader. The risk and reward ratio is increased, making short term trades more viable.

When you enter your CFD, the position will show a loss equal to the size of the spread. This means if the spread from your broker is 5 cents, you’ll need the stock to appreciate by at least 5 cents to break even.

CFD vs stock

Using the above example: let’s say the price of the underlying stock continues to increase and reaches a bid price of $26.00

If you owned the stock, your holding is now worth $2600. A nice profit – ignoring commission or trading costs the trader realised $100.

However, with the underlying stock at $26.00, the CFD would show the same $100 profit – but it required way less to open, just $125. So in terms of percentage, the CFD returned much greater profits. Had the market moved the other way, losses relative to our investment would have been larger too – both risk and reward are increased.

There are of course other benefits to owning an asset rather than speculating on the price. We also ignored commissions and spreads for clarity. But the above does illustrate the relative differences in the two methods of investing.

Application

As you are day trading you probably won’t hold any CFD positions overnight. Instead, you’ll likely place a high number of CFD trades in a single day. To maximise your returns you’ll want to concentrate on liquid volatile markets. CFD trading with oil, bitcoin, and forex are all popular options, for example.

CFD benefits

You may have already gleaned a couple of advantages above from cfds, but let’s break them down and add a few more.

Leverage – CFD leverage is much higher than traditional trading. You can get margin requirements as little as 2%. The rate usually depends on the underlying asset. Shares or volatile cryptocurrencies, for example, can reach up to 20%. Whilst low margin rates will allow you to take big positions with less capital, losses will also hit you harder.

Accessibility – the best CFD brokers will allow you to trade in all of the major markets. With so many markets that means CFD trading hours effectively run 24 hours a day. You’ll just need to check your brokers trading hours first.

Cost – CFD trading systems incur minimal costs. You will find many brokers charge little or zero fees to enter and exit trades. Instead, they make their money when you have to pay the spread. The size of the spread will depend on the volatility of the underlying asset. Note it is usually a fixed spread.

Less shorting rules – some markets enforce rules that prevent you shorting at certain times. They can demand greater margin requirements for shorting as opposed to being long. The CFD market, however, generally doesn’t have such rules, as you’re not actually owning the underlying asset. This means no borrowing or shorting costs.

Less day trading requirements – some markets require significant capital to start trading. This limits you to how many trades you can make, and in turn how much profit. An online CFD trader, however, can set up an account with as little as $1,000 to $5,000.

Diversity – whatever peaks your interest, you’ll probably find a CFD trading vehicle. You can start CFD FX trading, as well as utilising treasury, commodities, cryptocurrencies, and index cfds.

CFD risks

Despite the numerous benefits, there remain a couple of downsides to cfds you should be aware of.

Regulation – the CFD industry is not thoroughly regulated. This means it’s increasingly important you select the right broker. You need to make sure they are credible and in a strong financial position. For more guidance, see our brokers page.

Trading on margin – while margin increases profit potential, it also increases risk. It is very easy to lose sight of the total exposure you have when using margin. $2000 worth of open positions using 5% margins mean exposure to $40,000 worth of contracts. You are effectively borrowing $38k from your broker. If markets move against you, losses can exceed deposits. An awareness of the total exposure is very important.

How to start trading cfds

One of the selling points of trading with cfds is how straightforward it is to get going. You’ll need to follow just five simple steps.

1. Choose A market

There are thousands of individual markets to choose from, including currencies, commodities, plus interest rates and bonds. Try and opt for a market you have a good understanding of. This will help you react to market developments. Most online platforms and apps have a search function that makes this process quick and hassle-free.

2. Buy or sell

If you buy you go long. If you sell you go short. Bring up the trading ticket on your platform and you will be able to see the current price. The first price will be the bid (sell price). The second price will be the offer (buy price).

The price of your CFD is based on the price of the underlying instrument. If you have a reason to believe the market will increase, you should buy. If you believe it will decline you should sell.

3. Trade size

You now need to select the size of cfds you want to trade. With a CFD, you control the size of your investment. So although the price of the underlying asset will vary, you decide how much to invest. Brokers will however, have minimum margin requirements – or more simply, a minimum amount that is required in order for the trade to be opened. This will vary asset by asset. It will always be made clear however, as will the total value (or your exposure) of the trade.

Volatile assets such as cryptocurrency normally have higher margin requirements. So a position with exposure to $2000 worth of bitcoin, might need margin of $1000 for example. A well traded stock however, may only need 5% margin. So a $2000 position on facebook, may only require $100 of account funds.

4. Add stops & limits

This will help you secure profits and limit any losses. Most CFD strategies for beginners and experienced traders will employ the use of stop losses and/or limit orders. They tie in with your risk management strategy. Once you have defined your risk tolerance you can place a stop loss to automatically close a trade once the market hits a pre-determined level. This will help you minimise losses and keep your accounts in the black – leaving you to fight another day on subsequent trades.

A limit order will instruct your platform to close a trade at a price that is better than the current market level. If you opt for a trading bot they will use pre-programmed instructions like these to enter and exit trades in line with your trading plan. These are perfect for closing trades near resistance levels, without having to constantly monitor all positions.

5. Monitor & close

Once you’ve placed your trade and stop or loss limits, your profits will shift along with the market price. You can view the market price in real time and you can add or close new trades. This can be done on most online platforms or through apps.

If your stop loss or limit order hasn’t been activated you can close it yourself. Simply select ‘close position’ from the positions window. You will be able to see your profit or loss almost instantly in your account balance.

Strategies

Choosing the right market is one hurdle, but without an effective strategy, your profits will be few and far between. You need to find a strategy that compliments your trading style. That means it plays to your strengths, such as technical analysis. It also means it needs to fit in with your risk tolerance and financial situation.

Below two popular and successful CFD trading strategies and tips have been outlined.

Breakout strategy

This simply requires you identifying a key price level for a given security. When the price hits your key level, you buy or sell, dependent on the trend. The main thing to remember with breakout trading is to avoid any trades when the market isn’t providing clear signals.

If you can’t quite tell which direction the overall trend is moving in then give it a miss. This is where detailed technical analysis can help. Use charts to identify patterns that will give you the best chance of telling you where the trend is heading.

Contrarian strategy

This is all about timing. Your plan rests on the knowledge that trends don’t last forever. If a stock’s price has been on the decline then you identify a point where you believe it’s near the end of the trend. Then you enter a buy position in anticipation of the trend turning in the other direction.

You can follow exactly the same procedure if the price is rising. You can short a stock that has been increasing in price when you think a sharp change is imminent. Both wave theory and a range of analytical tools will help you ascertain when those shifts are going to take place.

For further guidance, see our strategies page.

CFD trading tips

If you’re looking to really bolster your profits consider these tips from top traders. Learn from their mistakes and hopefully, you won’t run into the same expensive pitfalls.

Control your leverage

Leverage is your greatest asset when you’ve made the right trade. The temptation to increase your position sizes when you’re winning is difficult to resist. However, there is always a loss on the horizon.

You don’t want to be the trader that turns a small account into a huge account, only to end up back at square one. So, you need to be smart. Nobody wants the margin calls and the stress that come with big losses. As paul tudor jones famously said, ‘don’t focus on making money, focus on protecting what you have.’

Having said that, start small to begin with. Keep your exposure relatively low in comparison to your capital. It’s a good idea not to leverage more than 3 times your account size, particularly at the beginning.

As your capital grows and you iron out creases in your strategy, you can slowly increase your leverage.

Keep A journal

A bit like a diary, but swap out descriptions of your crush for entry and exit points, price, position size and so on. This will be your bible when it comes to looking back and identifying mistakes. CFD trading journals are often overlooked, but their use can prove invaluable.

Hindsight is a powerful force, don’t waste it. You’ll be able to identify patterns, reflect on your trading emotions and streamline strategies. A thorough trading journal should include the following:

The instrument

The time you entered and exited the trade

Reasons for the trade, technical, news-based, etc.

Whether it was a profit or loss

A review of your trade performance (including whether you followed your trading rules)

What you learnt from the trade

It may sound time-consuming but it will allow you to constantly review and improve. You’ll make smarter and faster decisions, whilst those without are still scratching their heads wondering what they’ve been doing wrong for the last few weeks.

Use stops

Used correctly you’ll be able to minimise your losses, keeping you in the game. Each trade you enter needs a crystal clear CFD stop. This is because emotions will inevitably run high and the temptation to hold on that little bit longer can be hard to resist. As william O’neil correctly pointed out, ‘letting losses run is the most serious mistake made by most investors.’

So, define a CFD stop outside of market hours and stick to it religiously. This will also help you anticipate your maximum possible loss. You can then use the time you would be fighting an internal battle to research and prepare for the next trade.

Demo accounts

When you’ve completed your research and you’ve finally got the capital to start trading, it can be hard to resist jumping in head first. However, the switched on day trader will test out his strategy with a demo account first.

Plenty of brokers offer these practice accounts. They’re funded with simulated money, making them the ideal place to make mistakes before your real money is on the line. Not only can you test your strategy and get familiar with CFD trading markets, but they’re also an effective way to try your broker’s trading platform. You can make sure it has all the charting and analysis tools your trading plan requires.

When you’re comfortable and seeing consistent results on your demo account, then upgrade to a live account.

Education

Nobody likes to hear it, but school isn’t over. The best traders will never stop learning. You need to keep abreast of market developments, whilst practising and perfecting new CFD trading strategies. Learning from successful traders will also help. To do all of this you’ll need to utilise a range of different resources. To name just a few:

Blogs

Courses

Forums

Videos

Pdfs

Books & ebooks

Podcasts

Online guides

Regional differences

Taxes

Although you can trade cfds all over the world, where you’re based and the market you’re trading in can throw an expensive spanner in the works. CFD trading in the USA will be different to that in the UK, australia, india, south africa, and singapore.

This is mainly because of taxes. Different countries view cfds differently. Some consider them a form of gambling activity and therefore free from tax. Some countries consider them taxable just like any other form of income.

The tax implications in the UK, for example, will see CFD trading fall under the capital gains tax requirements. Although you get a £10,100 annual exemption, any profits that exceed that will be taxed. This means you should keep a detailed record of transactions so you can make accurate calculations at the end of the tax year.

So, before you start trading, find out whether you’ll pay personal income tax, business tax, capital gains tax, or if you’re lucky, no tax. Once you know what type of tax obligation you will face you can incorporate that into your money management strategy.

For more detailed guidance, see our taxes page.

Final word

Day trading cfds can be comparatively less risky than other instruments. Having said that, it will still be challenging to craft and implement a consistently profitable strategy. If you want to be a successful CFD trader you will need to utilise the educational resources above and follow the tips mentioned. As successful trader alex hahn pointed out, if you master your thinking and your emotions, nothing can stop you.’ so, the ball is in your half of the court now, go and turn it into gold.

What is the best CFD trading platform?

Wondering what the best CFD trading platform for 2021 is? Then look no further! Our guide will provide you with an introduction and comparison of the top platforms available, an introduction to the best indicators for cfds in metatrader 5 and much more!

For a beginner trader, CFD trading can be complicated, and its complexities might be a little overwhelming. It is therefore important to select the right trading platform - one that meets all of your needs and that is also easy to use.

Your chosen platform must be efficient for order entry and cancellation, to enable all of the account management capabilities and to facilitate market analysis. Technically, a trading platform that provides CFD trading should permit you to gain real-time quotes, analyse the markets, to enter orders, and to implement strategies. In addition to all this, the best trading platforms for CFD trading will also include a range of other useful tools and indicators.

Forex brokers supply different trading platforms to their clients, and a considerable number of online CFD brokers may provide the use of different independent platforms, like the metatrader (MT4) software package.

An introduction to the top platforms

If you are a professional trader, you probably already know which platforms are regarded as the best and most popular. Metatrader 4 and metatrader 5 (MT5) will give you exactly what you need. These two are undoubtedly the best platforms and deserve your attention.

Why is MT4 the king for CFD trading?

The world of CFD trading has adopted the MT4 platform as the market standard, and it is now used by hundreds of brokers worldwide. This was not an accident: the metatrader 4 platform offers traders advanced technology and extensive security, so that they can open and close positions without ever having to worry about the stability of their trading platform.

Chart 1: an example of the metatrader 4 trading platform. Disclaimer: charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by admiral markets (cfds, etfs, shares). Past performance is not necessarily an indication of future performance.

Key features of MT4

What is it that makes this platform so special? First of all, this CFD platform possesses a very user friendly interface to work with, empowering new and experienced traders alike to trade on this volatile market with ease. The second feature is the support of all major languages. Users worldwide can benefit from the metatrader 4 platform and all of its data in their own language, without any additional effort required.

Alongside these useful characteristics, the platform can offer you advanced and revolutionary charting capabilities. In turn, this enables traders to perform trades, and to thoroughly analyse the technical elements of the market at the same time.

There is also one very popular and powerful capability within the metatrader feature portfolio, and that is expert advisors. These are automated trading features which can automatically open and close trades based on preset rules. They can be sourced from a variety of suppliers to customise and enhance the capabilities of your platform.

Communication tools in MT4

It would also be a mistake not to mention the communication tools available in MT4. The software incorporates advanced communication tools for brokers to post messages, and to keep communicating with CFD traders in real-time. Long and complicated email threads are thus avoided, leaving you more time to concentrate on your trading.

Unlike a lot of other platforms, metatrader 4 requires moderately low resources to run, meaning that it keeps its disruption of your computer to a minimum. This also permits the platform to act much more swiftly, making it possible to accomplish trades and traders' requests straightaway. In addition, all users are able to view account information within the platform. Details available include trading history, access details, account balance, and also password information.

When you are dealing with a sensitive and private issue like CFD trading, you will of course want to ensure that your account is protected from potential hacks and attacks. Of all the CFD trading platforms available on the market, MT4 has one of the highest security levels that encrypts the data between a CFD trader and the server with a 128-bit key. The trader's IP address is also completely concealed.

Additionally, MT4 is very flexible and can be used to trade in a variety of other markets like commodities, futures and equities.

Customisation in MT4

The final point is that metatrader 4 allows customisation, so that CFD traders can tailor the trading platform to meet their own trading needs and practices. This includes the ability to develop and program your own expert advisors and technical indicators using MT4's advanced MQL programming language.

You can also boost the capabilities of metatrader with the metatrader supreme edition plugin from admiral markets. This excellent plugin enables traders to gain access to additional premium analytics, news, trading insights, and a range of innovative trading tools that enhance the trading experience. To find out more and to download metatrader supreme edition for FREE, click the banner below!

Download MT4 Supreme Edition with Admiral Markets

Trading cfds with metatrader 5

Metatrader 5 is the latest version of the outstanding and popular metatrader trading software. Let's first look at the interface. If you are in control of several accounts, it is easier than ever to manage them with metatrader 5. This is because the new accounts window in the 'navigator' tab permits movement between accounts quickly - facilitating the implementation of different trading strategies in different accounts, with no trouble or unexpected delays.

Chart 2: an example of the metatrader 5 trading platform. Disclaimer: charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by admiral markets (cfds, etfs, shares). Past performance is not necessarily an indication of future performance.

If you decide to generate two accounts in which you carry trade and scalp, for instance, it has never been easier to switch between the two categories to respond to unanticipated market events. Day-traders and long-term investors alike, appreciate this useful time saving feature.

The different types of indicators in MT5

There are many new indicators in MT5 not available in MT4. MT5 classifies CFD indicators into four different groups, as follows:

Oscillators

Trends

Volumes

Bill williams

Custom indicators are also supported. All this makes access to indicators considerably simpler and much faster.

There are new trend indicators like moving averages such as: the adaptive moving average, the double and triple exponential moving averages (EMA), and also the variable index dynamic average.

Among these indicators, the double exponential moving average (DEMA) is actually an advanced tool with minor lag and greater accuracy than a regular EMA. This variety is another reason why metatrader 5 can be considered the best CFD trading platform.

Among MT5 oscillators, there is the triple exponential average (TRIX). TRIX features a triple exponential moving average, and oscillates to nearly a centreline at zero. Efficient and assiduous filtering out of market noise is a noticeable advantage of this indicator.

Among the bill williams indicators, there is the new market facilitation index supplement. This tool releases signals on the basis of the mutual interaction between volume, price and the indicator itself. The total number of new indicators in this version of the software is seven.

MetaTrader 5 Trading Platform with indicators

Chart 3: an example of some of the trading indicators in the metatrader 5 trading platform. Disclaimer: charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by admiral markets (cfds, etfs, shares). Past performance is not necessarily an indication of future performance.

Among those, five new trend indicators plainly have the greatest potential. Both double and triple exponential moving averages and their derivatives, are the best new additions to the MT5 toolbox. For those who prefer to use automated trading, metatrader 5 has developed an excellent trading script and a strong expert advisor.

The metatrader 5 script is as powerful as ever, and this new version sees previous bugs and errors addressed. The programming language has also been enhanced and condensed into a more efficient and user friendly form. In addition, expert advisors in metatrader 5 empower the 'chart-in-chart style', which allows a more in-depth analysis of the technical strategy being tested.

Conclusion - what is the best CFD trading platform?

It is extremely important to choose a good platform when trading cfds. The platform should meet all of your requirements and should work for you. It is no mystery as to why metatrader platforms are considered to be the most popular and serviceable ones. They are uncomplicated yet powerful. Don't hesitate to test them both for yourself, as each one is a contender to be the best CFD trading platform.

If you're looking for a trustworthy, reliable broker to trade with, look no further than admiral markets! We are an award-winning, regulated broker that provide traders with the ability to trade forex, stocks, etfs, and cfds on bonds, commodities, cryptocurrencies, and more! Begin your trading journey the right way. Trade with admiral markets by clicking the banner below!

About admiral markets

Admiral markets is a multi-award winning, globally regulated forex and CFD broker, offering trading on over 8,000 financial instruments via the world's most popular trading platforms: metatrader 4 and metatrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

So, let's see, what we have: speculate on rising or falling prices of stocks, indices, forex or commodities! Choose a CFD broker or try a free demo account. At cfd trading platform