CFD Trading Brokers and Best CFD Broker List 2023
As an investor, have you ever think of the opportunity to make a profit from the price movement of an asset without holding that? This might seem illogical, but it is possible for European traders and investors. However, to get this, you have to trade with the CFD broker. CFD trading with best CFD brokers allows you to make a profit without owning the assets.
CFD trading allows you to make that kind of profit. Although it is a simple security calculation according to the asset’s movement, it has some underlying risks.
On the other hand, the best CFD brokers can reduce your risk. So, there is no such option rather than choosing some top-notch CFD brokers. In this article, you will get to know the details about CFDs and the brokers.
What are CFDs?
The full name of CFD is Contract for Difference, which is usually traded over the counter without owning an asset originally. However, CFDs don’t offer any delivery of securities or physical goods.
CFD trading works more likely on assumptions. For example, if a trader thinks that a currency’s price will rise then, he can buy a high amount. If the price increases, he may sell the holding and close the trading.
So, the net difference out of this trading would represent the profit. Check our best forex broker for CFD trading.
Types of CFD Trading Forex Brokers
- Non-Dealing Desk (NDD)- Digital Market Access
NDD usually allows direct access to the interbank market through STP (Straight Through Processing) or ECN (Electronic Communication Network). However, sometimes a mix of both types is used.
In NDD, trading orders are usually sent to the liquidity providers. But, it doesn’t take the client’s risk. Additionally, NDD CFD brokers work as a medium between the traders and liquidity providers.
ECN brokers usually connected to an electronic trading system that controls the buying and selling orders from a different liquidity provider. Therefore, ECN only connects different traders in a single place so that they can trade with each other.
On the other hand, STP CFD brokers don’t execute trade orders. They just provide a trading operation with any human intervention.
- Dealing Desk (DD)- Market Maker
Unlike the NDD, the dealing desk CFD broker never offers liquidity provider prices. Additionally, market maker CFD forex brokers are the ones who offer liquidity to its traders. Since they create markets for their traders, that is why they are called market makers. As a result, DD brokers have to pay to the profitable clients from the broker’s account. In simple words, if a client loses a trade, the CFD broker makes money, and it is vice-versa.
CFD Brokers Account Types
Usually, CFD brokers offer 4 types of accounts, which are newbie-friendly as well as for experts. Let see all the accounts at a glance.
- Micro Account: This type of account is solely for the beginners as well as for the expert traders who want to check out a CFD broker. However, the minimum deposit starts from as low as $50.
- Mini Account: It is great for the traders who want to invest a medium rage amount, such as between $500-$1000.
- Standard Account: Individual expert traders typically use this. Although the minimum deposits start from $1000, it offers high leverage options.
- VIP Account: Institutional investors open VIP account to put their big investments as it needs at least $20000 to invest. However, it may generate high leverage, which also comes with prompt customer support.
Top CFD Trading Platform for Forex
Although there are many forex trading platforms available for regular forex trading, very few platforms for CFDs. However, we have looked for the available CFD trading platform and found two of them very promising. These are Meta Trader 4 and Meta Trader 5, used by the best CFD brokers.
Meta Trader 4
After the introduction of Meta Trader 4, almost all the CFD forex brokers adopted the MT4 platform. It offers advanced technology with extensive security for both traders and brokers. Besides, traders can open and close positions without being worried about the stability of the platform.
Key Features of Meta Trader 4 CFD Platform
- The user-friendly interface possesses an easy way to conduct trade CFDs.
- It comes with multiple languages so that traders from different parts of the world can use it without any extra effort.
- Advanced and revolutionary charting features let you analyze the market and technical details completely at the same time.
- MT4 offers trader automation, which comes as expert advisors.
- With the customization feature, traders can establish their own trading strategy.
Meta Trader 5
It is the updated version of MT 4, which comes with controlling several accounts from a single platform. Moreover, the new accounts window in the navigation menu let you move between the accounts quickly.
Key Features of Meta Trader 5 CFD Platform
MT5 offers all the features that come with Meta Trader 4 along with the following additional features.
- You can use several accounts.
- This CFD trading platform offers different indicators, which are customizable and can get you to different trading strategies.
- For CFD trading, MT5 scripts are more powerful than the MT4.
How a CFD Forex Broker Makes Money?
As we have mentioned earlier, about two types of CFD brokers and both of them earn money in different ways. A Non-Dealing Desk CFD broker receives commissions from the trading. Sometimes they also make from variable spreads.
On the other hand, Dealing Desk CFD brokers earn from the spread and from clients. Whenever a client losses DD brokers earn.
It is highly important to choose good CFD forex brokers when you plan for forex CFD trading. Besides, platforms are also an important factor to look at. However, when you go for the best forex broker ( CFD ), you don’t need to check for the forex trading platforms as they offer the top platforms we have mentioned above.
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