A CFD trading platform is the central point of command for your trading. It allows you to track open and closed trading positions, see live market data, manage your finances, predict the price movements of assets, and even set up automated trading tools and rules. Using a great CFD platform can mean the difference between succeeding and failing in your trading career. Here’s what you should look for when making the crucial decision of which platform to use.

What Is CFD Trading?

Some of you may be wondering, “What is CFD trading?” Well, you need to have a clear understanding before deciding on a platform. It is a unique trading method that allows you to bet on the price movements of financial instruments without actually owning them. These financial instruments can include almost anything — stocks, gold, commodities, FOREX, cryptocurrencies, and more. Essentially, you buy and sell contracts where the buyer pays the seller the price difference between the point of purchase and the point of sale. Neither party owns the asset, which is why CFDs are a form of financial derivative.

CFDs are one of the most flexible trading tools. For example, when trading CFDs, you can easily open short positions and use leverage. These tools expand your trading options and profit opportunities, but can also increase your risk.

4 Features of a Suitable CFD Trading Platform

Here are the four key elements to focus on when making your choice. In general, if a platform does well in all of these categories, it should be a great foundation for a successful trading hobby or career.

Convenient Interface

A convenient interface is a must-have these days for almost any app. But, it’s especially true for trading. Your CFD trading platform is your hub for everything you need to make successful trades. You should be able to process large amounts of information on your chosen markets and make complex decisions quickly. This is why in a trading scenario, a well-designed interface is not just nice to have, it’s more profitable, too.

If you’re just doing trading as a hobby, then the interface should be intuitive for you to grasp. If you’re going into a career in trading, then look for one highly rated by professional traders. This will pay off in the long run. The interface should have concise overviews of asset prices, price histories, and a variety of useful chart and graph building options for you to exploit.

A convenient interface should also be customizable. Successful trading is all about designing your own unique strategy to compete in a sub-section of the vast trading market. It’s essential for you to be able to customize the details of your training dashboard and performance indicators. This lets you optimize your information flow to use your trading strategy to maximum advantage.

Access to Various Assets and Markets

A great trading platform must have a wide range of financial instruments for you to trade, including commodities, stocks, indices, FOREX, cryptocurrencies, and others. As your trading strategy develops, you may open your strategy to a wider range of instruments. It can be devastating to want to move into a certain market, only to find out it’s not offered on your platform.

This also goes for global markets. You should be able to access a diverse range of markets for each of the financial instruments mentioned above, including developed and developing markets. You don’t want to have to learn a new platform or shift all of your trading to another platform after you’ve built an efficient system.

The more financial instruments, the better chances of finding something suitable. If major tools within a particular area are missing, it won’t do any good. For example, if you can’t trade gold or there aren’t any CFD share options for Amazon, stay away.

Availability of Leverage

Trading and investment are all about the skillful management of risk, and one of the key risk management tools is leverage. A solid CFD trading platform should have leverage options available for its traders. This gives you more investment options with smaller amounts of capital and allows you to make a wider array of trades.

However, leverage is a tool that increases risk and so can lead to larger losses. You should understand the tools and leverage ratios you’re offered. Remember what hedge fund manager and bestselling author Larry Hite sayid: “Throughout my financial career, I have continually witnessed examples of other people that I have known being ruined by a failure to respect risk. If you don’t take a hard look at risk, it will take you.”

Risk Management Features

Other risk management features are also essential, including automated trading rules called orders. The first of these is the stop-loss order, which automatically closes your trading position when your losses reach a certain level. It’s easy to overlook how much downside risk a certain trade has. If you put in thoughtful stop losses on your trades, you’re protected if something goes wrong.

Limit orders are similar but automatically close the deal when the price reaches the desired threshold. Similarly, you can sell an asset at a certain price when it becomes available.

Final Thoughts

You should carefully consider your CFD trading platform before committing. You’ll be using its features for important tasks for a long time to come, and switching can be difficult down the line. Ensure the platform you pick does exceptionally well in the areas mentioned above, and you’ll have set yourself up for success.

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