One of the most important decisions (if not the most critical decision) you will ever make as a CFD trader is to choose the best online CFD broker to partner with. Succinctly stated, if you sign up with a poor-quality, disinterested, or fraudulent broker, you will lose a substantial amount of, if not your entire, investment.
Therefore, let’s look at several tips to help you make the right choice when considering trading CFDs through an online broker:
Website Quality
As a trader, looking at the user interface and usability of a broker’s website should be your first port of call.
Basically, if a broker’s site is poorly designed, looks untidy, its navigation causes user-confusion, and the site consists of poor-quality content, then it is a simple matter to assume that the brokerage firm does not have their trader’s best interests at heart. And it is advisable to stay away from this broker.
Trading platform
Succinctly stated, CFD trading is a fast-paced activity. Asset prices change all the time. Therefore, it makes sense that a broker needs to implement a powerful, user-friendly, quick trading platform that is able to keep up with the real-time changes in the asset prices. If the platform is slow and difficult to understand and use, then it is pointless signing up with the broker, as investors will not be able to place profitable trades.
Customer service
Succeeding consistently as a CFD trader is one of the most difficult challenges to master. However, at this juncture, it is vital to note that this statement is not designed to convince traders not to embark on an online trading journey. It is intended to alert novice traders to the reality of the risks and challenges of CFD trading. It is possible to learn to trade successfully.
Additionally, there are a number of documents that traders need to submit when opening an account with a new broker with the express aim of ensuring that only genuine clients sign up with a broker. These documents are grouped under the Know Your Customer (KYC) banner. And they include the following documents:
- Proof of identity
- Proof of residential address
- A copy of the bank statement that the trader intends to fund his/her investment account from.
- A declaration that the trading funds are from a legitimate source.
Thus, it is critical to partner with a brokerage firm that has an expert, dedicated customer service division to guide their clients through the complexities of the account creation process. Without the submission of these documents, investors cannot withdraw funds from their trading account.
Trading support
Essentially, traders learn to trade successfully through guidance and experience. Additionally, it is essential for traders not to trade on emotions. In other words, trading strategies must be determined before trades are placed and not changed based on emotions such as fear and panic. Warren Buffett, one of the world’s most well-known financial market investors, reiterates the importance of maintaining a steady temperament while trading CFDs:
“The most important quality for an investor is temperament, not intellect.”
To this end, quality CFD trading brokers employ a number of specialist financial market and trading analyst whose primary role is to look after the company’s traders.
Thus, each trader should be assigned a trading advisor who will offer practical guidance and advice to learn simple, but successful trading strategies. And to learn to use and interpret the many statistical price analysis tools.
Education centre or trading academy
Bearing in mind that one of the online trading brokerage firm’s primary aims is to ensure that their clients are afforded the best opportunities to make successful trades.
Therefore, an essential part of an online trading firm’s toolbox that prides itself on providing an excellent service to its clients is a comprehensive education centre that includes the following:
- A trading academy that provides detailed information (including eBooks and video material) for all levels of traders, from novice to expert traders.
- An in-depth explanation of what fundamental and technical analysis is and how each aspect affects the price of a CFD-linked asset.
- Supplementary material, documenting the use of technical indicators and oscillators like the Relative Strength Indicator (RSI) and the Bollinger Bars.
Final Thoughts
This article contains the essential points regarding the successful choice of an online financial trading broker like Jones Mutual. However, it is also just the tip of the iceberg. Consequently, the pertinent (or most important) takeaway point is summarised as follows:
“It is absolutely essential to perform due diligence on every CFD trading broker before opening up a trading account with them.”
