Learn CFDs online trading on top 5 platforms 2021!

Oct 20, 2021CFD Trading0 comments

CFDs are Contracts for difference, a short-term agreement between investor and broker or trader on the difference in the opening and closing of any financial instrument in the market. CFDs typically fall under derivatives trading and can be done on instruments like shares, commodities like Gold, zinc copper, or even on exchange rates of top currencies. Since this is speculative trading, it has to be done digitally on online CFD trading platforms available from registered and regulated traders. But before you go ahead with online CFD trading, you must know the basics of CFD trading; what is online CFD trading? How to set up your online CFD trading account? Which online CFD trading platform to use?

trade CFDs online

We have prepared a checklist and a guide to help you with online CFDs trading. Read up to know how CFD online trading is a simple and money-making profession.

Part 1: How to trade CFDs online?

Online CFD trading – how to start

CFDs trading can be done online on sinking or rising markets by speculating on the difference in the rate of a financial instrument. You can use leverage or margin trading to protect your investment by investing a small percentage of the total transaction. Such online CFD s trading is a 24×7 business, and you can use these to add to your growing portfolio and make serious profits.

Learn the steps of online CFD trading

1. Choose your market

Online CFDs trading is a complex business, with hundreds of trade markets which include stocks, bonds, indices, currencies, and commodities scattered across the globe. The major financial markets are UK, US, Europe, Australia, and Asia. As a result of these opportunities, it is wise first to understand which market to trade in and know more about it to trade professionally. You will need to use specialized research tools provided by the online CFD trading portals to fine-tune your investment strategy.

2. When to buy and when to sell

Once you select the trading market, you have to know the current price of your financial instrument by taking a trading ticket on the CFD online trading platform.
While online CFD trading, you need to know two prices; the price at which you buy (offer price) and the price you sell (bid price). The difference between the buy and sell is called the spread, and this depends on the financial instrument you want to trade.

The simple strategy for online CFD trading is to buy when the market is going up and sell when the market is sinking. Buying in an upward market is going long, and selling in a downward market is called short.

3. Trade size selection

In online CFD trading selection of trade, size becomes essential from the point of view of your investment exposure. For an equity CFD trade, 1 CFD is equal to 1 share. But for other financial instruments value of 1 CFD varies with the type of instruments like Forex, index, or commodity. To know your trade size, you can check the “tick value” in the information sheet for each instrument. During online CFD trading, you always trade in the base currency of the market.
The best part of CFD online trading is using the margin function. You can leverage the market by investing only a small proportion of your total transaction amount and start trading on an online CFD trading platform.
Higher is your transaction value; higher will be your requirement for trading margin. Online trading platforms have digital margin calculators which give exact requirements for margin money. You will need to keep a sufficient debit balance linked to your online CFD trading account in your bank account. The money gets debited or credited directly from your bank account in online CFD trading.

4. Stop-loss and limit

You have to have a risk management strategy in place before you start online CFD trading on any available platform.

One key functionality for managing your risk is to use Stop loss and limit while ordering your transaction. Stop-loss is a set limit below the market value of the instrument. If the market falls below this limit, the CFD trade is automatically closed by the online CFD trading platform, thus, avoiding the risk of loss. Similarly, you can put a limit order when the market is moving in the upward direction. If the price of the CFD breaches the upper limit set by you again, the trade will automatically close, and profit will book into your account.

5. Trade Monitoring

Monitoring your online CFD trading is possible on most platforms today through a desktop application or a mobile app. You can now closely monitor the market movements and the change in the price of your CFDs. You can book profits or reduce your losses while trading online CFDs with correct stop loss and limits set.

6. Close your trade

When you want to end your trade, you need to perform reverse action, which means selecting your closing position in the positions window of your online CFD trading platform. Once you close your open position, the profit booked or the loss accumulated will automatically be credited or debited from your linked bank account. The system will, however, automatically close your trade if your stop loss or limit breaches.

Part 2: Top 5 platforms for online CFD trading

There are many online CFD trading partners and platforms available in the market today. Choosing the right trading platform before you jump into online CFD trading becomes imperative. We give you an insight into the top 5 platforms for online CFD trading. Go through our analysis and choose the right online CFD trading platform for you to start your CFD investment.

1 – OANDA

OANDA

One of the leading online CFD platforms with an experience of 25 years of trading in multiple financial instruments, be it shares, Forex, indices, and commodities, are Oanda. Oanda offers excellent prices for online trading. They deal in a variety of CFDs. Their margin starts from 0.8 points on UK 100 market to 1 point of the German 30 market to as low as 0.6 points on the Euro-USD currency pair or 0.8 points on the Euro-UK Pound pair.

CFD Trading

You can buy or sell CFDs online on the Oanda trading platform. Start trading online with over 120 financial instruments as an option which includes 70 forex currency pairs. Buy or sell CFDs on commodities, metals, stock, or bonds.

At Oanda, you have a choice of 4 of the worlds leading platforms for online CFD trading. You can choose the user-customizable Oanda Trade, a web-based and PC-based platform, or use their mobile app. You can do speculative trading in Forex using another MT4 platform.

Is OANDA safe?

Financial authorities maintain Oanda like the National Futures Association (CFTC), the US Commodity Trading Futures Commission, and the UK’s Financial Conduct Authority (FCA). And so, it is safe. It is not under any stock exchange.

Customer service:

Oanda’s customer service support provides its customers with several channels like phone support and live chat (with an Oanda rep). Oanda also provides chatbots (virtual assistants) and email. It provides a fast response time. Live chat and phone option is only available between Sunday and Friday.

Instruments:

Oanda provides instruments like Forex, Indices, Metals, Commodities, and Bitcoin.

Spread:

The spreads are changeable as the instrument’s price fluctuates. Know about some of them.

Instrument Spread Instrument Spread
AUD/CAD 1.8 China A50 11
AUD/CHF 1.6 Copper 25
AUD/JPY 1.3 EUR/AUD 2.1
AUD/NZD 2.1 EUR/CAD 2.2
Bitcoin 100 EUR/CHF 1.3
Brent Crude Oil 4 Germany 30 1.9
CAD/CHF 1.7 Gold 31
CAD/JPY 1.3

Margin:

Check out some margin.

Instrument Margin from Instrument Margin from Instrument Instrument Margin from
AUD/CAD 0.67% Bitcoin 10.00% Copper 1.00% Germany 30 0.50%
AUD/CHF 0.67% CAD/CHF 0.67% EUR/AUD 0.67% Gold 0.50%
AUD/JPY 0.67% CAD/JPY 0.67% EUR/CAD 0.67%
AUD/NZD 0.67% China A50 0.67% EUR/CHF 0.67%

Deposit and withdrawal:

There is no minimum deposit requirement in Oanda. It allows traders to deposit up to US$9,000 using your account.
Oanda charges no account fees also. The inactivity fee in Oanda is reasonable. Withdrawal of money is free of charge with a debit/credit card. Transferring bank and PayPal withdrawals are high.

Leverage:

Margin reflective of max leverage is 200:1.

Trading experience:

The web trading platform Oanda is user-friendly with good customizability. It doesn’t provide an option to set price alerts. It allows traders to enjoy a two-step login.

Trading platforms:

Oanda’s trading platforms include MT5 and MT4 for web, desktop, and mobile for trading.

Some highlighted features of Oanda Trade are

1. Use Technical Analysis Tools

Oanda Trade provided great KPI alerts, overlays, and built-in data analytics for informed decision-making. Use them to create your investment strategies and limit your risk and losses.

2. Trade Performance Analytics

Oanda gives a full post-trade analysis of your transactions in comparison with the market situation. You can use their library of trade analysis on past data to strategize your investments. With data at your fingertip, you will never miss an opportunity in online CFD trading and learn to manage your risk with great ease.

3. Personalized screens

You can personalize the way your investment screen looks with your personal preferences. You have the option to create multiple trading profiles and manage your default trading option. All this is in a drag and drop option on your desktop or mobile.

4. Market depth function

At Oanda, you can use their minimal margin spreads called DoM of the depth of market to benefit from starting fee of just 0.6 points on a currency pair like EUR-USD.

5. Total market coverage

With Oanda Trade, you get minute-to-minute real-time trading news from the market live on to your screens.

6. Fully automated trading

The processing of trading calls is fully automated. Trading requests are on the real-time market price of the traded instrument.

2 – CMC Markets

CMC Markets

CMC Markets is UK’s award-winning leading online CFD trading platform to trade across the globe on 11000 markets. They have a dedicated team of experienced traders to support their online CFD trading platform services. They offer the best rates for spreads, have advanced functions, and have no manual intervention from dealers on any trade size.

Is CMC Markets safe?

CMC Markets is secure under authorities like the Financial Conduct Authority (FCA) and the London Stock Exchange.

Customer service:

Customer service of CMC Markets has the options like live chat, phone, and email in several languages. Customer support at CMC Markets is very much reliable.

Instruments:

Offered instruments of CMC Markets are Commodities, Forex, Cryptocurrencies, Indices, Shares & ETFs, and Treasuries.

Spread:

Though spreads are variable, check some popular instruments’ spread below:

  • Forex: EUR/USD- 0.7; GBP/USD- 0.9
  • Indices: US 30- 2.0; UK 100- 1.0
  • Commodities: Gold- 0.3; Crude Oil West Texas- 2.5
  • Treasuries: UK Gilt- 2.0; US T-Bond- 3.0

Margin:

Depending on the variable spread of instruments on CMC Markets, the margin differs.

  • Indices- 5%
  • Shares- 20%
  • Commodities- 5%
  • Cryptocurrencies- 50%
  • Treasuries-3.3%

Deposit and withdrawal:

There are deposit and withdrawal options on CMC Markets. Almost all withdrawals processes are free. The fee for international bank transfers will be £15.

Leverage:

The leverage will be 30:1 for the offered margin of 3.3% on Forex. In this way, the calculative leverage will be on the current margin.

Trading experiences:

CMC Markets have a powerful platform named ‘Next Generation’ with a more customizable modern design but no two-step authentication.

Software:

MetaTrader 4

Next Generation

Mobile trading apps (iPhone, iPad, and Android)

Users:

CMC Markets provide services to 80,000 registered clients.

Some of its highlights are

1. Best Charting facility

Investment trends awarded CMC Markets the best charting tool of 2019. Their online CFD trading platform provides 115 KPI’s and drawing tools, 70 plus patterns, and 12 built-in charting tools.

2. Advanced order execution

The CMC Markets platform offers special advanced tools like guaranteed stop losses, trailing, interim closure, market, and boundary orders on every investment. Complete flexibility for personalized trading on their online CFD trading platform.

3. Pattern recognition scanner

They have a pattern recognition scanner as a special tool on their online CFD trading platform. You can analyze 120 products every 15 minutes to get upcoming trends and patterns. Set alerts to get advance intimation of investment opportunities.

4. Client Sentiment

The CMC Markets platform provides advanced features like client sentiments that give insight into each product’s market sentiments, giving details of how many investors turned sellers or buyers for a particular CFD. You can get a clearer image of your transaction value in terms of the percentage of this platform.

3 – Plus500

Plus500

Plus500 is a CFD online trading platform regulated by CySEC, Cyprus Securities & Exchange Commission, and listed on FTSE250 and London Stock Exchange. As per CySEC guidelines, when an investor opens an account with Plus500, they will hold your deposit money separately. Their mobile app has garnered the highest rating both on Google play store and the Apple app store. This CFD online trading platform provides very advanced features.

Is Plus500 safe?

Plus500 has listed itself under the London Stock Exchange under the Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC). As Plus500 is listed under a stock exchange and authorized under top institutions, it is considered secure.

Plus500 Customer service:

The provided customer support options of Plus500 include live chat, WhatsApp, and email. It offers great customer support 24/7. The live chat and the email responses offer relevant answers.

Plus500 Instruments:

Plus500 offers trading instruments like Forex, Commodities, Crypto, Shares, Indices, Options, and ETFs.

Plus500 Spread:

The spread on instruments differs, and the platform doesn’t mention the spread as prices fluctuate. Some major currencies spreads are available on Forex; check them

AUD/USD Spread is $0.0008 per unit/0.01%.

EUR/AUD Spread is $0.00025 per unit, 2.5 pips/0.02% (Sept).

GBP/AUD Spread h4 0.02%. $0.00029 per unit (Sept).

Plus500 Margin:

On Forex, the margin is 0.33% for major pairs. The margin varies on other instruments. Except Forex’s spread for several currencies, the margins of instruments are not disclosed by the platforms.

Plus500 Deposit and withdrawal:

Plus500 has a requirement of a minimum deposit of $100. The offered deposit and withdrawal services include many options. The withdrawal process is free of charge with the availability of a credit/debit card option.

Plus500 Leverage:The overall minimum lavage is 30:1. Check leverage on different instruments.

  • Trading on shares utilizes leverage through Contracts For Difference, including commission-free on any trades.
  • On Forex, major currencies’ leverages are currently 300:1.
  • Offered leverage on Indices of up to 300:1.
  • Commodities get traded for AUD 100.
  • The leverage on commodities is lower at 300:1.
  • ETFs have leverages of each 1:100.

h4 >Trading experiences:

The proprietary platform called WebTrader offers a great trading experience. WebTrader helps set up watchlists, analyze charts for trading with 100 technical indicators that will help traders place orders, and monitor them.

Trading platforms:

Plus500 offers WebTrader, a proprietary platform.

Users:

Plus500 serves near 100,574 new customers.

Features

1. Control over trading

Use their Stop loss, stop limit, and trailing stop features to gain complete control over your online CFDs trading.
They offer a guaranteed stop for lowering risk and loss during online CFD trading.
They provide email and push notifications on every significant market movement, so you don’t miss any event.
You can personalize alerts for price movement, change %, and traders’ sentiments.

2. Explore markets

This online CFD trading platform provides a trading opportunity on more than 2000 financial instruments. You get real-time quotes for free and, best of all, 24×7 customer support for all investors.

4 – IG

IG platform

IG is a world-leading online CFD trading platform designed for traders and experienced traders. Its trading platform is easiest to use, guided by trading ideas and user-friendly support as a standard feature. They offer online trading for more than 17000 financial products across the global markets.

As an experienced trader, you get a highly effective trading platform with 24×7 customer support, tight margin spreads, and a team of experts to guide you in CFD online trading. This online CFD trading platform offers a knowledge section for learning and key trade insights for a new investor. And a free demo account to familiarize and handhold in initial investments.

Some of its features are

  • The simple and user-friendly web-based platform
  • The app is optimized for all types of devices, be desktop or mobile or even tablets.
  • Best analysis using the charting facility.
  • Comprehensive alerts and risk management is available.

Is IG Markets safe?

IG Markets is authorized under the Federal Financial Supervisory Authority (BaFin) and the Financial Conduct Authority (FCA). As it is also under the London Stock Exchange, it is safe.

Customer service:

IG customer service support offers services 24/7 to traders. Traders get relevant answers through its service supports. Service through email and phone can be slow. The live chat stays offline most of the time.

Instruments: >

IG offers trading instruments such as Commodities, Forex, CFDs, Shares, Indices, and Cryptocurrencies.

Spread:

On major Forex currency pairs such as EUR/USD has the spread starts at 0.6 pips. On commodities like Spot Gold, the spreads are from 0.3 pips.

Margin:

On IG includes the margins range from 3.33% to 50%. Forex, Commodities, and indices offer the margin based on the leverage of 200:1.

Deposit and withdrawal requirements:

The minimum amount for card payment is $300. IG offers free and fast deposit and withdrawal processes such as PayPal, bank wire transfer, and credit card funding with multiple options.

Leverage:

IG provides low maximum leverage of 50:1.
Trading experience:

With IG, traders will get great trading experiences. IG provides technology, including great designing to ensure an easy-to-use web platform.

Trading platforms:

IG offers several platform options for trading like Trading signals, Trading alerts, MetaTrader 4, Mobile trading, Algorithmic trading, ProRealTime, and API interfaces.

Users:

IG broker platform has around 313,300 active users worldwide.

5 – AvaTrade

AvaTrade

Is AvaTrade safe?

AvaTrade is authorized under financial organizations such as the Central Bank of Ireland. That indicates it is safe.

Customer service:AvaTrade customer service includes contacting options, including live chat, phone, and email support. AvaTrade offers great customer support, relevant answers but is not available 24/7, only 24/5.

Instruments:

Instruments offered by AvaTrade include Commodities, Forex, Stock, Indices, Cryptocurrencies, FXOptions, ETFs, and Bonds.

Spread:

The spreads varies, check some of the variable spread below:

  • Stocks: 0.13%
  • Forex: EUR/USD  0.9; GBP/USD 1.6; USD/JPY 1.1; EUR/CHF 2
  • Commodities: Gold 0.34; Crude oil 0.03; Platinum $1.10 over market

Margin:

Variable margin includes:

  • Forex: EUR/USD 0.25%; GBP/USD 0.25%
  • Stock: 10%
  • Commodities: Gold 0.5%; Silver 2.0%; Platinum  2%

Deposit and withdrawal requirements:

AvaTrade offers a minimum deposit of $100. With AvaTrade, withdrawal can sometimes take three business days.

Leverage:

Forex leverage offers 400:1 and on commodities like Gold has 200:1, Crude oil has 100:1, and Platinum has 50:1.

Trading experience:

AvaTrade focuses on a Customer-First Approach and ensures a pleasuring trading experience.

Trading platforms:

AvaTrade provides AvaTradeGO, AvaOption, Mac Trading, Web Trading, and AvaSocial for trading.

User:

AvaTrade serves over 200,000 registered active clients.

Benefits of Avatrade

Trading with confidence

Avatrade is an online CFD trading platform available in 6 continents based on seven regulations. It is internationally regulated and offers dedicated trading websites.

Variety of trading instruments

On Avatrade, you can do online CFD trading for commodities, indices, ETF’s shares, bonds, and even cryptocurrencies like Bitcoin & Ethereum.

Powerful platform for trading

You can use an automated web-based platform for online CD trading or even a manual but effective trading platform based on MT4.

Leverage trading

Avatrade offers leverage trading in CFDs with minimum investment and maximum profits.

Informed trading

Use their trading information library to make strategic decisions and get comprehensive customer support.

UThey provide dedicated customer support through account managers, and you can select support in your preferred language.

Part 3: Some FAQs about trade CFDs online

1 – When should I buy CFDs online?

Since CFD are derivatives and short-term contracts, you can start online trading anytime on many online CFD trading platforms. You can buy CFDs when the markets are in an upward move.

2 – Do day traders trade CFDs online?

Yes, day traders trade in CFD online as they are a speculative form of trading. Also, they are short-term investment opportunities based on the opening and closing price of the financial instrument you are trading.

3 – What is the best online CFD trading platform?

The best online CFD trading platforms offer tight spread, the opportunity to trade in multiple financial products, and varied global markets.

Lastly, let’s check a comparison table including the performance rating of each trading platform.

Broker platforms Overall Rating Fees Account opening Deposit and withdrawal Trading platform Markets and products Research Customer service Education
OANDA 4.6 4.1 4.4 4.2 4.8 1.6 4.5 4.5 4.5
CMC Markets 4.6 3.7 4.1 4.8 4.2 2.2 5.0 4.5 5.0
Plus500 4.4 2.9 5.0 5.0 4.9 1.9 3.3 5.0 3.5
IG 4.4 2.9 5.0 5.0 4.9 1.9 3.3 5.0 3.5
AvaTrade 4.5 3.5 5.0 4.5 4.1 2.0 4.6 4.5 5.0

Conclusion

As a speculative trader, you need to have the best information and real-time trends to make informed decisions. An online CFD platform that provides the best features with minimal manual interventions during online CFD trading can make CFD trading user-friendly and risk-optimized. So, if you want to put money in the derivatives market and make good profits, online CFD trading is an excellent option for experienced and novice traders.

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