CFD brokers choosing advice :

How to choose the right product from the above CFD trading test or comparison

I have been enthusiastic about writing and copywriting since my early youth. Since 2020 I have been writing and editing as a topic expert on comparisons around food and travel.

1
the essentials in brief
CFD trading is trading purely on rising or falling prices. A CFD broker is essential for this. Here are the best CFD brokers put to the test! This can refer to shares and currencies, mineral resources, or stock market indices (such as the DAX).
CFD is not for beginners. It’s day trading! Anyone who has no idea what is going on here should get in with a trial account or very little money to slowly learn the business.
CFD trading risks that considerable sums have to be paid back if speculation goes wrong and so-called leverage has been used.
CFD-Broker Test
1. What are CFDs?
CFD stands for the English: Contract for Difference – in German: Contracts for difference.

CFDs are closed to bet on a price going down or up, e.g., B. a share. So it is not the share itself or a currency, a mineral resource, or an index that is traded, but only the development.

The stock exchange traders call this actual value the “base value.” A share such as B. Telekom’s is a “base value.” If the price rises, this is called “long”; if the value should fall, it is called “short.”

You can “bet” on anything. Stocks, currencies, natural resources, and other securities are common – but 92% of all CFDs are concluded on stock indices (e.g., DAX)! Ultimately, it is a bet on rising or falling prices.

Financiers invented this “bet on rising or falling prices” to avoid a tax in London. The British government taxed every official stock transaction. The result: outside of the stock exchanges, bets were now made on what was going on, the rise and fall of prices. Today it has turned into lively trading, still mainly off the stock exchange.

CFDs are highly speculative, as there is a risk of the total loss of the capital and additional payment obligations!

In the US, CFDs are banned – for an understandable reason. In Germany, too, a ban is being considered in 2021.

2. How does CFD trading work?
Attention beginners!
The CFD business follows its own professional rules. To learn how many CFD brokers offer online courses in the test. Some basic knowledge of chart analysis, CFD strategies, and the recognition of trading signals are an absolute must, as is practicing on a demo account – i.e., a bonus CFD broker – without your own money.

shutterstock_489205723
CFDs are rarely traded on the stock exchange! Hardly any branch bank deals with CFDs – that’s why traders need a broker who even offers CFD trading. All CFD brokers are also online brokers; hardly any of them offer CFD trading on their own. That is why we have tested the CDF brokers here in comparison.

The CFD trade is dependent on two things: dealers, called brokers who engaged in trade, and someone who “opened” a market in which it offers a bet that they are “market makers” so named the “market makers.”

To trade CFDs, interested parties need a CFD depot – how it works here – with a broker. When choosing the CFD broker or online broker, a comparison is recommended because of a few things to consider.

Very few CFD contracts are concluded on the stock exchange, which means they are not very regulated.

according to the CFD Association EPOETMHUGI , 554.1 billion euros were traded in 2015 – in Germany! The tax revenue of the whole of Germany is only approx. 570.21 billion euros in the year (2013)! That all sounds rather dangerous. Does anyone even do that?

Why do people do this? Because the winnings – if your bet works – are also very high :

2.1. Margin
Anyone who concludes a CFD contract only has to pay a certain, small percentage immediately. This is called “margin.” That is usually only 10%, sometimes only 1% of the amount due.

2.2. The leverage
But that also means that someone can move 10 to 100 times with their money what they actually could because they only have to pay 1-10%. This is called leveraging.

The leverage of the margin makes it possible to turn over much more significant sums than the available capital.

With CFD trading, investors can thus trade the full price movements of stocks, indices, raw materials, bonds, etc., with a fraction of the capital otherwise required. But then the profits will also be very high, provided you are correct:

CFD Trading share Stock CFD Index-CFD
leverage 1 10 100
Margin 100% 10% 1 %
Capital employed € 1,000 € 1,000 € 1,000
Leveraged capital € 1,000 € 10,000 € 100,000
Profit // loss 1% change 10 € € 100 € 1,000
Gain // loss 5% change 50 € € 500 € 5,000

2.3. Spread
The term spread is often quoted in CFD trading. The spread is the difference between the buying price and the selling price.

Spread has two other meanings: A fee is due to the broker for each trade (also called trade). Since trading is based on a spread, the term “spread” has also been used for this, so spread means:

The spread between buying and selling price,
the process itself is the trade, i.e., buying and selling a CFD and

3. What to Look for When Choosing a CFD Broker
type
A lot is thought about one’s own CFD strategy. Get started, it doesn’t matter yet, but it gets more interesting as each broker specializes. We recommend a good broker for beginners in conclusion below. A wide range of opportunities and markets for trading is good, and a website that reacts quickly (immediately!) And reliably.

3.1. What are the fees?
The following fees might be charged :

Transaction costs, including, e.g., B. Trading Fees and the Bid-Ask Spread,
Account management fees,
Financing costs if long positions are held overnight as this is a leveraged deal.
We like brokers who allow you to use your website, platform, and tools free of charge and who take no fees for deposits and withdrawals. Free real-time quotes are also necessary to be on the way to our favorite broker.

Caution – CFD trading is day trading! Anyone who holds a value overnight is considered a bore and has to pay fees! A fee is due for just one night. These are the financing costs mentioned above!

Account management fees are annoying. Some brokers make money for deposits, others for withdrawals! An outrage. Many brokers charge for inactivity. I don’t do anything and have to pay money? Well, our banks are increasingly demanding this for an account.

Transaction costs mean: A fee is charged per trade, also known as a “pip.” The pip varies, so it is hardly possible to set a value in euros permanently. But our calculator can do it because it calculates up-to-date daily.

3.2. How clear is the website?
Broker websites are also often called platforms. There are high requirements to be met: beginners have to find their way around quickly. Professionals get the tools they need. Professionals use charts and need to look at the past to evaluate a chart and anticipate price developments.

3.3. Minimum deposit and CFD demo account
The minimum deposit should be only 100 euros, and for those who want to train first, a free demo account is excellent.

Demo account Since the losses are high with this speculative investment, newcomers and those who have no CFD trading experience should use a demo account intensively for at least three months before they get into the real trading world and learn CFD trading – use real money!

What else you can watch out for and what effects this has financially can be followed here, albeit a bit lengthy:

3.4. Customer ratings
In addition, you will find customer ratings for many CFD brokers in the review, which gives you a quick overview of general customer satisfaction. That doesn’t always make sense, but here it does. The customer who deals with CFDs is already specialized and at a considerable level. So if he comments on the broker, he will write something meaningful. Otherwise, it is more of a made-up review.

3.5. What underlyings does the broker offer?
Everyone is particularly interested in other values; of course, your CFD broker must be well-positioned compared to those ​​that interest you.

3.6. Admission and seat
Monitoring by a significant state institution should be a matter of course. In Germany, BaFin strictly monitors all financial service providers; we generally like brokers who have at least one seat in Germany. It doesn’t have to be German CFD brokers.

What we like and don’t like about CFD brokers compared:

eToro Review

You can trade an average amount of products on eToro. The same is true for currency pairs and commodities. eToro, on the other hand, provides a broader choice of stock and ETF CFDs than its closest competitors, as well as the ability to trade many of the most prominent cryptocurrencies.

The mobile platform of eToro is well-designed and user-friendly. It’s a joy to work with. Advantages and disadvantages • Easy to use • No Touch/Face ID login • Two-step (secure) login • Good search function The eToro mobile trading platform is accessible for both iOS and Android devices. We put it through its paces on iOS. It supports the same 21 languages as the web trading platform. The mobile platform is just as functional as the web platform. It makes use of mobile-specific intuitive features like push notifications and effective touch interactions. For example, in your portfolio, you can swipe left and right to see charts or place a new transaction. Go to the broker. Your money is in jeopardy.

eToro is a multi-asset broker with many US-listed equities, currency pairs, cryptocurrencies, and CFDs. They have 26 distinct languages available. More than 70 technical indicators are included in charting tools.

eToro generates revenue in three ways. They work as market makers, employing an NDD – STP hybrid methodology. They profit from traders’ losses and are audited to maintain market fairness. The second method they profit from is from CFD fees and commissions. They also benefit from non-trading costs such as withdrawal and inactivity fees.

Currently, eToro has 20 million registered users globally, including millions in 43 states in the United States. States like Delaware, Minnesota, New York, Nevada, and Tennessee allow residents to sign up for eToro but not to trade. Smaller states like Hawaii and territories like the Virgin Islands ban people from becoming eToro clients. Residents of the remaining US states are permitted to trade on eToro but cannot trade in CFDs. They even get privileges and savings on fees that other countries don’t have. As part of its expansion strategy, eToro is interested in expanding permitted operations and establishing platforms for free stock trading. This will enhance rivalry in the niche of share trading and digital currency between eToro and Robin Hood (which only operates in the United States).

Since 2007, Etoro has been one of the major trading platforms in CFD, social, and copy trading. You can invest in over 2,000 different assets and marketplaces. Since 2017, the spectrum has also grown to cover new digital currencies such as Bitcoin, Ethereum, and others (cryptocurrencies). The Etoro brand is supported by a forward-thinking firm that aspires to compete by developing the most powerful trading platform.

Etoro is more than simply a broker; it provides many different alternatives to engage in the financial markets. As a trader, you can, for example, copy other traders or become your signal. It is also quite simple to invest in larger CopyPortfolios. Etoro makes an excellent initial impression on me because of its suitable corporate data and offers for traders. Etoro is one of the best & most popular UK’s CFDs providers here.

You can also trade CFDs at eToro on a long or short basis. Simply put, this means you can try to profit from both rising and declining markets. For example, if you believe the value of HSBC shares will fall, you can place a sell order. If you believe the shares will rise in value, you should put a buy order.

A £10 minimum deposit and stake is required, with odds of 1/5 per multi-selection. Free bets are distributed in the form of 4x £5 tokens that are good for 7 days. Stakes are not refunded, and there is no cash-out
options. A £10 minimum deposit and stake is required, with odds of 1/5 per multi-selection. Free bets are distributed in the form of 4x £5 tokens that are good for 7 days. Stakes are not refunded, and there are no cash-out options.