Demand for CFD trading continues to soar among professional & retail traders alike, as CFDs represent the ideal instrument for short-term trading & hedging. Finding the best CFD brokers poses a challenge, with hundreds of available choices. We've researched them thoroughly to assist you in your trading journey.
High floating leverage + fast execution
Daily market research and Autochartist access
High level regulation in multiple jurisdictions
Impressive range of tradeable assets including vanilla options and gold options
Solid broker for scalping and hedging
Institutional-style trading opportunities for retail traders
Most extensive crypto derivatives offering. Choice of 250+ Crypto CFDs
Multiple funding and swift withdrawal options
Ultra-low spreads across all Crypto derivatives
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500..
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
- Eightcap, Competitive pricing + excellent daily videos.
5.0/5 in this category
Best all-around broker with high floating leverage and fast execution
FXTM opened their forex/CFD brokerage firm in 2011 and are perhaps better known as “ForexTime”. The company is primarily regulated through the Cyprus Securities and Exchange Commission (CySEC), with additional regulation through the Financial Conduct Authority (FCA) UK, the Financial Services Commission (FSC) of the Republic of Mauritius, and by the Financial Sector Conduct Authority (FSCA) of South Africa. An important feature of FXTM is that it can tailor its offerings based on where its dealers are located in the world. This includes a wide range of forex pairs and crosses (including some exotics), gold, silver, natural gas and crude oil, as well as various cryptocurrencies, CFDs on major American stocks, and major equity indices
Excellent commission-based Forex pricing environment and transparency
Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
Quality market research and educational content for beginner traders
Proprietary copy trading platform, low minimum deposit, and high leverage
5.0/5 in this category
ECN trading with leverage up to 1:500.
The twelve MT4/MT5 add-ons at FP Markets upgrade the core trading platform to a competitive version. It also supports retail account management via the MAM/PAMM infrastructure and offers Autochartist to manual traders and VPS hosting to those with automated trading solutions. Myfxbook AutoTrade caters to social traders. The proprietary Iress trading platform remains location-restricted but is the only one offering access to the 10,000+ CFDs. Traders will benefit from the ECN cost structure of 0.0 pips raw spreads and a commission of $6.00 per round lot. The minimum deposit is $100, and the maximum leverage is 1:500. Additional benefits include an execution speed below 40 milliseconds and a no dealing desk (NDD) execution model. The unregulated FSC-registered unit caters to most international clients.
Choice of trading platforms and auxiliary trading tools
Very competitive cost structure and excellent asset selection
Low minimum deposit requirement and leverage of up to 1:500
Well-regulated and trustworthy
4.5/5 in this category
Highly regulated, choice of fixed or floating spreads
AvaTrade has an exceptional educational unit in SharpTrader, but traders must carefully consider the subsidiary they decide on. The ASIC, FSCA, BVIFSC, and FSRA provide a competitive trading environment. The minimum deposit of $100 unlocks maximum leverage of 1:500 and provides access to more than well-selected 1,250 CFDs. Traders also have a broad range of trading platform choices, including the core MT4/MT5, together with the proprietary WebTrader, AvaOptions, AvaTradeGO and AvaSocial. Additional copy trading platforms available at AvaTrade are ZuluTrade, MQL5 Signal Service and DupliTrade. The commission-free cost structure is average with minimum spreads of 0.9 pips or 0.13%.
High-quality educational offering via SharpTrader
Excellent choice of trading platforms catering to various trading needs
Broad asset selection and cross-asset diversification opportunities
Well-regulated and trusted broker with oversight from a central bank
4.5/5 in this category
Best ECN trading environment, with scalping and hedging
BlackBull Markets was founded in 2014 in New Zealand. Like many antipodean Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
BlackBull Markets Pros & Cons
ECN/NDD execution model with deep liquidity
Institution-grade pricing for retail traders via proprietary price aggregation
ZuluTrade and Myfxbook for social trading
Leverage of up to 1:500
4.5/5 in this category
Competitive pricing + excellent daily videos
MetaTrader 4, MetaTrader 5, Trading View
Eightcap Pros & Cons
Low minimum deposit and high leverage of up to 1:500
Competitive cost structure
Excellent technology infrastructure and seasoned management team
Daily research and quality educational content
CFDs became the best trading instrument for professional traders and retail traders alike. First introduced in London in the early 1990s for professional clients and in the late 1990s to retail traders, they offer leveraged trading without owning the underlying asset. CFDs grant trading opportunities in a cost-efficient manner, as transactions do not require settlement of underlying assets. Therefore, it allows retail traders to participate in any market their broker provides.
Several regulators took steps to limit leverage or ban advertising of CFDs amid mounting retail losses related to an absence of understanding. They are an over the counter (OTC) product specifically written for leveraged transactions, but traders must understand the risks involved before using CFDs. CFD brokers are usually market makers who hedge exposure by taking positions in the underlying assets matching their order book. They also profit from client losses, with an average of 75% of retail traders managing loss-making portfolios.
CFDs grant traders exposure to price action without asset ownership. Traders can benefit in either direction in a leveraged transaction, freeing up trading capital and gaining exposure to international markets with a cost-efficient and competitive product, as long as traders use it for short-term trades. CFD traders enjoy unparalleled freedom and diversification opportunities, even from smaller deposits, if proper risk management exists.
CFD traders have two distinct choices:
- Market Makers: They work with liquidity providers and match orders from their internal order book. Market Makers may also become the direct counterparty to client positions. Spreads are generally higher in a commission-free trading environment.
- Direct Market Access (DMA) Brokers: Traders have direct access to liquidity providers via ECN and no broker intervention. Active traders get access to raw spreads for a commission. They are ideal for active traders and often come with a volume-based rebate program.
While some brokers offer the same trading account type to all clients, others prefer a structured approach. The most popular ones include:
- Micro Account: They are ideal for new traders to learn how to trade or test new trading strategies or automated trading solutions.
- Mini Account: An excellent choice for traders with portfolios of less than 10,000.
- Standard Account: This is where brokers offer their complete product and services portfolio. While the minimum deposit is often $100 or less, they are best suited for portfolios above $10,000.
- VIP Account: Intended for professional traders, they come with non-trading related perks and a decrease in leverage. Most brokers ask above $50,000 for it.
Trading costs will have the most significant direct impact on your trading strategy and portfolio. The two most significant ones consist of:
- Spreads & Commissions: Spreads are mark-ups and translate into broker profits above market rates. Market makers derive their income primarily from them. Commissions apply at ECN brokers, where traders usually have access to raw spreads.
- Financing & Hedging: Swap rates on leveraged overnight positions is another cost traders must consider. Hedging is another way CFD brokers make money. It is necessary to limit liabilities when clients earn profits, which remain offset by hedged positions in other markets totaling the order book.
The MT4, MT5, and cTrader remain among the most deployed trading platforms with full support for automated trading solutions. They are available as a desktop client, a webtrader, and a mobile app. The best CFD brokers additionally deploy proprietary trading platforms or offer upgrades to existing ones to ensure clients have an edge.
Traders must ensure that brokers offer their preferred payment methods. When you compare CFD brokers, make sure that low-cost payment processors remain part of the overall mix. All brokers support bank wires and credit/debit cards, but I recommend keeping trading-related activities and day-to-day ones separate. Traders must also check deposit and withdrawal fees from the broker, payment processor, and banks.
I recommend that all traders manage their portfolios with regulated brokers. The European Securities and Markets Authority (ESMA) maintains the least competitive one, and traders should avoid CFD Forex brokers governed in that jurisdiction. Among the best regulators are the ASIC, the FSCA, the BVIFSA, the FSC, the IFSC, the DFSA and the CIMA. They provide an excellent mix of security and competitiveness for brokers and traders alike.
While preferences among traders differ, the following deserve consideration:
- Fee Structure: Tight spreads and low commissions with a volume-based rebate system remain the most competitive offer for active traders.
- Products and Markets: Traders should seek a broad asset selection and competitive trading tools to gain a competitive edge. Support for third-party applications is an additional benefit.
- Account Opening: A swift online process with mandatory account verification remains the established industry standard.
- Deposits and Withdrawals: The best CFD Forex brokers offer low-cost and instant third-party non-banking payment processors.
- Web Trading Platform: Proprietary trading platforms offer manual traders an excellent alternative. The best CFD brokers have APIs to allow third-party solutions access.
Traders must understand all costs. They will have the most significant impact, especially over time. While a spread difference of 0.1 pips or a reduced commission of 0.1% may appear insignificant, they add up. Traders can save thousands by selecting a competitively priced CFD broker. Broker fees consist of spreads, commissions, swap rates, currency conversion fees, withdrawal charges, market access costs and inactivity levies.
Demo accounts provide traders an opportunity to evaluate a trading platform. They also serve for testing new trading strategies and bug fixing of automated trading solutions. While many note them for educational purposes, they provide no value as they omit trading psychology and promote a false sense of accomplishment.
We reviewed over 100 brokers in-depth based on eleven criteria from the perspective of a trader. Each research consisted of over 2,000 words and lasted more than ten hours. We ensured the most comprehensive approach to identify the best copy trading platforms.
The eleven criteria used in our research consist of:
- Regulation and Security
- Trading Costs
- Asset Selection
- Account Types
- Trading Platforms
- Unique Features
- Research and Education
- Customer Support
- Bonuses and Promotions
- Account Opening Process
- Deposits & Withdrawals
Is Forex trading a CFD?
Forex trading is not CFD trading per se, but there are CFDs available to trade on currency pairs provided by CFD Forex brokers.
Why is CFD illegal?
CFD trading is legal in most parts of the world, with the US and Canada being an exception, where outdated regulation does not permit OTC products that do not pass through a regulated exchange.
How do you trade CFDs in Forex trading?
You need to have a funded account with a CFD Forex broker and trading knowledge with experience.
How do brokers make money on CFDs?
CFD brokers primarily earn money from spreads, commissions, and swap rates on leveraged overnight positions. As market makers, they also profit from client losses where they are the direct counterparty.