Digital trading, especially CFDs, is a system that is of growing interest to more and more individuals. Many like to talk about it and want to know more about it, as it is possible to make money (and even a lot of money) if you do it right.
In addition, it is possible to invest a small amount, although some investors start with large investments at the outset. Protected CFD trading is accessible to everyone and does not require special financial or complex calculation skills, as some might think.
Below you will find my comparison table to select the right broker for you.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
In order to make timely profits from trading, it is important to first understand how it works. This understanding is essential if you want to be able to make money regularly by trading
CFD trading is the simplest of all financial speculation activities. Indeed, all the parameters of trading or classic are known in advance, i.e. maturity and return, and there are only two possible outcomes: either you gain a capital gain or you lose the money you invested in a given financial asset.
The very first step in trading is to choose your broker carefully. Indeed, any transaction can only be carried out through these websites and their trading platform. And there are many brokers on the market, not all of them are 100% reliable. It is therefore better to choose a regulated and easy-to-use broker.
If you have made the right choice regarding your broker, then you will have no difficulty trading CFDs. We have provided a summary of each protected CFD broker to give you a quick overview of the strengths and weaknesses of each one.
Top 3 protected CFD legal brokers
The following table summarizes what there is to know about the 3 best regulated brokers on the market. By creating an account with one of these brokers, you have the opportunity to make your first trades, and little by little, you will earn money by trading smart.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Performance and earnings
Each trade has its own profit potential, which is determined by the market. It is generally represented by a percentage that differs from one broker to another. This return is 60% to 90% return on investment depending on the underlying asset. It is therefore more interesting to choose brokers that offer high and diverse returns to diversify trades and optimize profits.
It is also advisable to make a deposit and a trade amount large enough to hope to earn a worthwhile profit. Of course, before buying CFDs, you should analyze the option and evaluate the risks and choose the amount to invest. Otherwise, your profits will be marginal and you won’t make much, even on many winning trades.
Available Assets
Brokers differ from one another in the number and diversity of assets they offer to their clients. Indeed, each broker has its own list of assets for which it offers trades to its clients. The broker that has a great diversity and a large number of underlying assets is therefore the most interesting. Nevertheless, all brokers should have in their list the most popular assets in the market.
In the case of protected CFDs, the assets can be :
- Currency pairs: EUR/USD, EUR/GBP, USD/GBP, ..
- Listed shares: Nissan, Apple, Microsoft, Facebook, ..
- Stock market indices: CAC40, Dow Jones, Nasdaq, ..
- Raw materials: gold, silver, oil, copper, ..
Trading gold, silver, oil, the CAC 40, Apple stock, Coca Cola…
Trading Hours
There is also an important detail to consider when entering the protected CFD market, which is the trading schedule. Indeed, although it is possible to trade CFDs 24 hours a day for some brokers, there is a time slot during which it is more interesting to trade protected CFDs.
It is when several markets are open at the same time (overlap time) that it is interesting to trade CFDs. This is because during this period, the level of volatility is high and the market follows a certain trend, which makes it easier to predict the rise or fall in value of an asset.
Here are the opening hours of each financial market in the world (French time):
- The Sydney market is open from 10pm to 9am
- The Tokyo market which opens at 01h and closes at 10h
- The London market which is active from 09:00 to 17:00
- And finally the New York market which opens at 2pm and doesn’t close until 11pm
The hours when two or more markets are open simultaneously are the most interesting as many traders around the world make their CFD purchases and sales at these times, resulting in more interesting trading and higher profits at this time.
The only time when there is little market volatility is therefore between 11pm and 1am as there is no market overlap during this time.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Customer Service
A broker is generally required to provide free assistance to any customer who has opened an account with them. Indeed, new and even experienced users sometimes have questions or things they don’t understand, such as the terms of use and payment or the bonus system.
In any case, customer service must be a priority for any broker and he must know how to respond to his clients’ requests without them waiting too long. This service must also exist in the language of the user for the sake of clarity of information. In short, customer service must be available at all times, efficient and responsive to any customer question.
As a regulated broker, customer service meets all these criteria. Customer service is available in French, English and other languages, ensuring that you are well understood and that you understand the answers that come to you. In addition, this customer service is available 24 hours a day, 7 days a week and will be able to deal with your requests accurately.
Support in the trade room
Trade room support is also an essential option, especially for novice traders who are not used to the interface. Indeed, the trader can ask questions and request information on this or that asset, this or that market development before deciding whether or not to invest.
In this context, the support in the trade room is a valuable aid, which every broker should take advantage of. This support is directly available in the trade room, with the help of an icon representing a phone or a message, which allows the trader to choose whether he wants to call an advisor directly or chat with him.
Some brokers also have financial advisors who regularly inform traders over the phone to give them trade signals or offer guaranteed trades. Although these calls are tempting, one must first assess the risks related to a trade before committing oneself, because one must not forget that we are talking about money and that the trader has the last word.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Alerts
Many brokers offer alerts in the form of email, SMS or other audio alerts to warn traders of asset movements and developments. By doing so, brokers draw traders’ attention to trade signals or useful new information. In any case, these alerts are very practical as they allow the trader to stay informed.
Regulation
In order to avoid any problems with withdrawing money or not having the money available, it is highly recommended to choose a regulated broker. What does the term “regulated” mean? Well, a regulated broker and a broker who respects rules of transparency and honesty. It means that you can trust him because he will pay you all your earnings.
The regulated broker must comply with a number of criteria, the most important of which is the separation of client accounts from company accounts, to guarantee the payment of traders’ debts, even if the company is bankrupt. There is also a blacklist of brokers, i.e. brokers that are not regulated and to be avoided, which is regularly published and updated by the AMF, the French financial markets authority.
Who are the regulators?
There are many bodies that can regulate brokers in Europe. For most brokers, whose companies are based in Cyprus, CySEC is in charge of regulation. Once this regulation is obtained, brokers are licensed throughout Europe.
Sometimes brokers add authorisations, notably from the Prudential Control and Regulatory Authorities (ACPR) of the Banque de United Kingdom, the FSA in England, the BaFin in Germany and also Mifid for Europe. These authorisations certify that the broker complies with the rules in force in the issuing country and this assures you in the event of a possible conflict with your broker.
In United Kingdom, the AMF draws up a blacklist of Forex brokers who are not recommended for non-compliance with French regulations. We invite you to consult it regularly on the AMF website.
Withdrawal Process
Each Dealer offers a different withdrawal process and it is important to take into account this withdrawal process and the time it takes each Dealer to transfer your winnings to your Bank account. Please note that the transfer time will also depend on your bank and not only on your broker.
For example, a transfer to a La Banque Postale account can take up to five days, while a transfer to a CIC account can take only two days.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Forex Trading
Another alternative to trading is the Forex and CFD market. They offer more possibilities and are mainly aimed at experienced traders. The Forex or Foreign Exchange Market and simply the currency market. The objective is to trade a currency pair to gain the difference on the exchange rate. CFDs are also assets modelled on real assets (Contracts for Difference, which allow you to trade stocks without owning them and with the possibility of applying leverage). You can find currencies, shares, indices, commodities in the form of CFDs.
Forex and CFDs are much more demanding. Trading in these markets can involve high risks to your capital.
Your capital is at risk
Your capital is at risk.
66% of retail investors’ accounts lose money when trading CFDs with these providers. You should ask yourself whether you can afford to take the significant risk of losing your money
Here is a list of regulated Forex and CFD brokers in United Kingdom to help you get the most out of the currency market.
Leverage
Leverage is an important element in Forex. It allows you to multiply your gains, in case of a bad trade your losses are increased. You have to take into account the full extent of this tool. In principle, your broker offers you the possibility to increase your capital for a trade with this famous effect.
For example, a leverage of x100 on an investment of 100 euros corresponds to an amount of 10,000 euros registered for your trade. Your trade volume is multiplied for more gains. If your trade fails, the losses also increase, which can be catastrophic for the trader who has to recover the amount. Fortunately brokers also offer risk management tools to limit losses (automatic loss limit order, automatic closing of the trade when the rate falls below the coverage of your investment). Leverage should be used with care. It is the major risk if poorly managed in the case of a trading activity.
In summary
When choosing a protected Forex and CFD broker, it is important to keep in mind some key points such as investment conditions, alerts, withdrawal process, reference base and prices, customer service and support, trading hours, user interface, returns and deposit promotions. If you are a beginner, please feel free to consult our practical guides before choosing your broker. Here you have all the information you need to get started with online trading.
Trading CFDs and Forex with leverage can result in losses greater than your capital, please trade with full knowledge of the facts. The risk is very high.