Broker to Trading

CFDs are Contracts for Difference. A CFD allows the provider and client to exchange the difference in value of the CFD from the beginning to the end of the trade. CFDs are based on an underlying market and will normally reflect the value of this market. As CFDs are separate from the asset, the trader can go long or short and can use leverage. CFD providers can have a wide range of different features, but may focus on particular features to identity them. The focus on this page is features for traders who make their own trades or want to trade small trade sizes.

The trader may notice that the term CFD provider is used rather than broker. Provider is the recognized term, though the 'broker' is still established as an identifier, for historical reasons. The features offered by providers can fall into distinct classes, though there will tend to be commonality in the offering provided. For example, spreads are a feature which can be of importance to the trader, thus there are providers which offer different types of spreads.

Some providers may focus on fixed spreads, others may aim to offer very low variable spreads normally with a commission charge. What types of features are of interest may be consequent on the type of traders used by the trader. Traders who trade on their own behalf rather than using robots, may want particular types of features, such as a user friendly platform and perhaps fixed spreads, or at least spreads without a commission charge.

Robot traders on the other hand may want spreads as low as possible, with a competitive commission charge, so they can have an idea of this part of the cost of trade, as they may be making a lot of trades compared with a human trader. These are not fixed categories, as human traders may trade on shorter frequencies and robots may trade on longer frequencies. So in terms of spreads, providers may offer variable of fixed spreads (or both). Variable spreads vary, while fixed spreads tend to stay fixed (but can change in volatile market conditions, or if they do not may not be tradable at times). However some providers focus on fixed spreads, so a choice is made for a Fixed Spreads Provider.

One factor which traders may look for is the capacity to place small trade sizes. There can be a variety of reasons for this, including that the trader is trying to test out strategies or robots on a live account. However traders may wish to trade with small trade sizes so they can trade with a smaller account size. Thus providers with low trade sizes may have a lower minimum deposit.

A type of provider offering low minimum trade sizes is known as a Cent account. However this term may not be used by the provider. Instead another term, such as a Micro account may be used. A Micro account is a long standing term to describe an account with offers trade sizes down to standard micro lots (which is 0.01 lots). However, a Cent account is a MetaTrader account which is denominated on cents. Thus it allows trade sizes up to 1/100th the size of a standard lot account. Hence a Cent account is also a Micro account of this type of MetaTrader account denomination (a micro account of a standard micro account). A choice is made here for Cent Account Provider.

Some CFD providers offer a wide range of types of markets. As they are CFDs, they can be traded in rising (going long) or falling (going short) markets and can come with leverage (increasing leverage increases risk). Some traders may wish to have a wide choice of markets to trade. While there are basic categories common to most providers, some make an effort to provide a wide range within each category. So a choice is made of Wide Range Of Markets.

Traders can use a demo account for many purposes, including practicing trading and familiarising themselves with the provider's features and trading platforms. So a choice is made of a CFD Demo Account.