CFDs Trading and Brokers
When trading the global markets, specialization means better information and better performance.
What is a CFD?
A CFD (Contract for Difference) is a derivative product that allows investors to trade the direction of any global market (Forex, Equities, Cryptocurrencies, Commodities), without the need of owing any physical units. CFDs are easy-to-trade and offer the opportunity to speculate on the future market movements of a wide variety of underlying assets.
Compare Popular CFD Brokers
These are some regulated CFD brokers offering segregated client bank accounts. All the following companies have been operating in the market for at least 5 years.
CFD BROKER |
SAFETY OF FUNDS |
TRADING TERMS |
PLATFORMS / ASSETS |
ACCOUNT INFO |
BROKER'S INFO |
■ ROBOFOREX
US TRADERS: NO ISLAMIC ACCOUNTS: YES EXECUTION: ECN/STP |
REGULATION:
ACCOUNT SEGREGATION:
CORPORATE INFO: The broker was founded in 2009 and it is based in Belize CUSTOMER SUPPORT:
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SPREADS EURUSD: 1.0 GBPUSD: 1.4 USDJPY: 1.2 COMMISSIONS: No SCALPING: YES AUTOMATED TRADING: YES SLIPPAGE: 0.3 pip LEVERAGE: 1:30 |
PLATFORMS:
PAMM: NO DEMO: YES FREE VPS: YES RoboForex welcomes scalpers and algorithmic traders ASSETS:
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MIN. DEPOSIT: $10 DEPOSIT FUNDS:
TRADING PROMOTIONS:
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KEY POINTS
► Open a Real/Demo account with RoboForex
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■ IC MARKETS
US TRADERS: NO ISLAMIC ACCOUNTS: YES EXECUTION: ECN / STP |
REGULATION:
ACCOUNT SEGREGATION:
CORPORATE INFO: The broker was founded in 2007 and it is based in Australia. CUSTOMER SUPPORT:
|
SPREADS EURUSD: 0.1 GBPUSD: 0.3 USDJPY: 0.5 COMMISSIONS: $7.0 / lot SCALPING: YES AUTOMATED TRADING: YES SLIPPAGE: 0.8 pip LEVERAGE: 1:30 |
PLATFORMS:
PAMM: YES DEMO: YES FREE VPS: YES (100 round turn lots per calendar month are required) ASSETS:
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MIN. DEPOSIT: $200 for the MT4 account and $1,000 for the cTrader account FUND METHODS:
TRADING PROMOTIONS:
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KEY POINTS
► Register a Real or Demo ECN Account with IC MARKETS
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■ LQDFX
US TRADERS: NO ISLAMIC ACCOUNTS: YES EXECUTION: ECN |
REGULATION:
ACCOUNT SEGREGATION:
CORPORATE INFO: The broker was founded in 2015 and it is based in Malta CUSTOMER SUPPORT:
|
SPREADS EURUSD: 1.1 GBPUSD: 1.4 USDJPY: 1.2 COMMISSIONS: No SCALPING: YES AUTOMATED TRADING: YES SLIPPAGE: 0.8 pip LEVERAGE: 1:30 |
PLATFORMS:
PAMM: NO DEMO: YES FREE VPS: NO LQDFX welcomes scalpers and algorithmic traders ASSETS:
|
MIN. DEPOSIT: $20 DEPOSIT FUNDS:
TRADING PROMOTIONS: 100% Cash Bonus
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KEY POINTS
► Open a Real/Demo account with LQDFX
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How do CFDs really work?
A CFD contract is designed to track the price movements of any financial instrument. That means that a CFD contract is able to mirror the price fluctuations of almost every traded financial asset. When a new position is opened, the profit/loss is determined based on the price movement of the underlying asset.
A CFD trade can close in three ways:
(i) If the price of the underlying financial instrument touches the take-profit price (pre-determined profit)
(ii) If the price of the underlying financial instrument touches the stop-loss price (pre-determined loss)
(iii) The trade can close also manually by the trader anytime he wants to
Example of a CFD Trade on EURUSD (Calculating the Profit/Loss)
For example, it is assumed that a Forex trader buys 1 lot of EURUSD at 1.1002, and later sells it at 1.1022
CFDs and Cost of Trading
These are all the fees and commissions charged by CFD brokers that you should know about before starting a new account.
(1) Trading Spreads
Where can you find information about the trading spreads? at each CFD broker's website or via 3rd parties specialized in comparing spreads
The spread is the difference between ask and bid. The great majority of CFD brokers charge trading spreads without any trading commissions. The minimum spread when trading CFDs is about 1.0 pip on EURUSD. A clever way to reduce your trading cost is to join a trading rebate plan.
Be aware of Re-Quotes (if you plan to trade intraday)
A re-quote means that when you open a trade position the price you pay is worst than the one you have entered. That means extra cost. Re-quotes usually occur in fast-moving markets, such as markets after important news announcements. You can protect your account from re-quotes by placing a pending order (limit order) and not an instant execution order. When you place a limit order, you state that you are willing to open a trade position at a specific price or better.
(2) Trading Commissions Charged
Where can you find information about the commissions? at each CFD broker's website
CFD brokers usually don't charge trading commissions. When they do, these commissions are calculated on a round-lot basis.
(3) SWAPs / Overnight Financing
Where can you find information about the SWAP rates? at CFD broker's website
Explanation of SWAP Rates in Forex
As currencies are traded in pairs, each time a transaction occurs, one currency is purchased and one currency is sold. There are Forex currencies offering high-interest rates (NZD, AUD, etc.) and other currencies offering low-interest rates (USD, EUR, etc.). When you trade any Forex pair, the difference between the two interest rates may be positive or negative:
(i) If the difference is positive, then a swap amount is credited overnight
(ii) if the difference is negative, then a swap amount is debited overnight
Note, that if you trade commodities or equities, the SWAP rates will be always negative.
TIP: Avoid paying SWAP fees by trading CFDs on Futures
A very smart way to avoid paying SWAP rates is to buy CFDs on Futures. For example, if you buy the USD30 Index via a CFD on Futures you will pay a greater spread but you will not pay any SWAP charge until the contract ends. Usually, CFDs on Futures last 2-3 months and mirror the price movement of the underlying asset exactly the way a simple cash CFD contract mirrors it. If you are a swing or a long-term trader, CFD on Futures is your best weapon to make money.
(4) Funding (Deposit/Withdrawal) Fees
Where can you find information about these fees? Use each CFD broker's live chat service
Funding fees may be charged on deposits and/or withdrawals.
(5) Maintenance/ Inactive Fees
Where can you find information about these fees? Use each CFD broker's live chat service
A few CFD brokers may charge fees for inactive accounts. These fees are called Maintenance/Inactive fees.
Some Important Tips When Trading CFDs
These are some key tips when you are trading CFDs:
(1) Limit your deposits
(2) Limit your portfolio risk
(3) Place small pilot orders
(4) Trade what you know
■ CFDs Trading and Brokers
TradingFibonacci.com
COMPARE TRADING SIGNAL SYSTEMS
-COMPARE SYSTEMS-
A trading signal can be seen as a sign of an important upcoming market movement. This sign alerts traders to instantly buy or sell the market at an early stage of the market movement.
A trade signaling service usually operates as a monthly subscription service. But there are also trading systems that are programmed to generate trade signals based on their complex algorithms. These systems are purchased ones and can be used in unlimited MT4/MT5 accounts.
These are some popular MT4/MT5 trading signal generators.
TRADING SYSTEM |
ASSETS |
SIGNALS / PLATFORMS |
DELIVERY METHODS |
COST |
LINKS |
◙ EA BUILDER
|
■ Foreign Exchange ■ Energy ■ Metals ■ Stocks & Indices |
◘ Create custom trading signals ◘ All timeframes ◘ Advances Technical Analysis tools ◘ Money Management ◘ Convert your ideas into Expert Advisors (EAs) ◘ Education (tutorials & videos) ◘ MT4 / MT5 / TradeStation |
|
> Free for creating indicators > 97.00 USD (One-time fee) for creating EAs
|
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◙ FOREX TRENDY
|
■ Foreign Exchange ■ 34 Forex pairs |
◘ Trading signals for beginners ◘ 9 timeframes ◘ Trend Analyzer ◘ Custom Interface ◘ All trading platforms ◘ Recognizing Triangles, Flags, Wedges, and Trendlines |
|
> 37.00 USD / 3-Months
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◙ FIBO QUANTUM
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■ Foreign Exchange ■ Any Forex Pair in Multiple Timeframes |
□ Trades any Forex Pair in Multiple Timeframes (M15, M30, H1, H4, and D1) □ Shows exact points for entering/exit (Includes Take-Profit and Stop-Loss levels) □ Price Volatility Detection □ Multiple Trading Styles and 3 different modes (Conservative, Normal, and Aggressive) □ Never Re-Paints |
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> 147.00 USD (One-time fee) |
More: » Online Brokers
Trading Signal Categories
A trading signal which is based on technical analysis can take various forms (intraday, daily, swing signal). These signals are usually triggered by price breakouts, reversal/continuation patterns, etc. But a trading signal can also be generated via the use of fundamental analysis. For example, due to unexpected fundamental changes, the price of gold is expected to move 3-5% higher.
In general, trading signals can be categorized based on their delivery method (manual and automated trading signals).
Manual trading signals are delivered via email, SMS, on-screen, or even via Social Media.
Automated trading signals are delivered via a copy-trade mechanism on MT4, TradeStation, and similar trade platforms. There are hundreds of automated signal providers online.
MORE: » ONLINE FOREX BROKERS COMPARISON
■ Trading Signals
TradingFibonacci.com