Choosing Between Different CFD Trading Platforms
A CFD (Contract For Difference) trading platform enables market participants to see live prices and trade in real time. Each market maker uses its own proprietary technology to reflect existing prices and grants trading platform access to its customers. Full-service platform providers also offer a comprehensive set of research and analysis tools.
What CFD Trading Platforms Have For You
In addition to detailed data and technical information, CFD trading platforms feature capabilities long-expected by today's sophisticated traders, including automated stop-loss orders for a specific position to minimize losses and take profit orders to protect your gains. Use of these risk control tools is an essential component of a disciplined successful trading strategy, in which attention is finite and all available resources must be adroitly employed on your behalf.
A wide variety of market mechanisms exist today for participants to trade on price movement expectations. CFDs are unique in that the available CFD trading platforms presented to you have no explicit brokerage element. Within the CFD trading platforms, the trader establishes a position as if he was directly a market participant and realizes gains or losses from the price movement only (after accounting for the bid-ask spread). Unfortunately the greatly expanded set of opportunities has in no way reduced the essential requirements for a successful trading career: discipline, attentiveness, ability to learn from mistakes and to manage stress.
What You Want Your CFD Platform To Have
At a minimum, your platform should accept trading orders whenever the underlying market is open. For forex, the open hours are 24/5. From Monday to Friday, a registered exchange with sufficient liquidity is always open. Other instruments, like commodities, shares and indices are not traded on all exchanges. Still, among New York, London and Tokyo, 22 of 24 hours are covered.
Additionally, CFD trading platforms should fully support all internet access environments from desktop through mobile and in each have all your account and position information available in a helpful friendly interface.
Finally, the available interactivity should reasonably approximate and mimic the way you work. You should be able to set reminders and prompts based on a variety of market and position occurrences.
Which Platform To Choose? A number of platforms may meet your minimum requirements. Your selection process should include, at a minimum:
- Testing the process with virtual trades in a demo account
- Interacting with platform personnel to gauge the service level
- Confirm the platform's legitimacy with the relevant regulatory authorities
- Investigate customer satisfaction as per comments on relevant forums and sites