Choosing CFD Broker
Modern tools allow anyone to buy and sell virtual derivatives from the comfort of their home. Contracts for Difference are a popular instrument that can boost your profit and limit trading risks. It is a common addition to diversified investment portfolios. However, picking the best CFD broker may be a challenge.
In Nigeria, these services are offered by local and international intermediaries. In this article, we will discuss the crucial criteria that help identify trustworthy brokers. Traders with little experience may fall victim to fraud unless they take the task seriously.
Benefits of CFDs
Today, online trading is booming, as over 15 million people buy and sell virtual instruments through the internet. Given the sheer convenience and profit potential, this figure is only projected to grow. The COVID-19 pandemic has highlighted the value of remote earning schemes. In Nigeria and elsewhere, conventional employment systems are now shattered, while digital trades are as robust as before.
CFDs allow clients to profit from price dynamics without owning the underlying assets. The latter may be:
● stocks,
● market indices,
● commodities,
● cryptocurrencies, etc.
Rather than buying shares on the physical exchange, choose a derivative connected to their value. This way, prices are all that matters. Everything relies on your ability to foresee market ups and downs, and use those for profit. So, how can you identify the most reliable intermediary for the task?
1. Regulation of Brokerage
Naturally, any broker must be an officially registered entity. The firm must be licenced to operate in the region. Global brands have an obvious advantage, as these are also overseen by credible watchdogs, such as the Cyprus Securities and Exchange Commission (CySEC). Without a licence, CFD brokerage services are illegal. Hence, unless these details are specified on the official website, move on to another candidate.
2. Costs of Trading
Focus on the terms and conditions applicable to CFD trades. Sometimes, clients are lured in by advertisements of low transactions costs only to discover they have grown afterwards when abandoning the broker is complicated.
For a CFD trader, costs comprise their commission per trade and interest applied to leverage. Naturally, the lower these are — the better. However, do not base decisions on price alone — focus on the bigger picture, i.e., the entire structure of costs.
3. Software for Trades
The software must be easy to use. Top choices for trading CFDs in Africa include MetaTrader 4 and MetaTrader 5. Although these platforms have been in use for years, they are still the industry favourites. Trading terminals do matter: they should have clear procedures for position management. These allow you to trade in a stress-free environment, so confusion does not impact results.
4. Accepted Payment Systems
Make sure the brokerage accepts payment tools convenient for you. Otherwise, depositing and withdrawing will be complicated. Any reputable brand will offer a broad range of options, including e-wallets.
5. Customer Support 24/7
Reputable brands invest in their help centres. Clients receive prompt assistance and advice concerning any aspect of CFD trading.
6. Online or Offline?
While brick-and-mortar brokerages do exist, there aren’t many reasons to use them. Modern online services bring multiple benefits. These include the immediate execution of trades, lower costs, and easy monitoring. Generally, it is preferable to trade through an online broker with a physical presence in your country. For example, FXTM has offices in Abuja and Lagos.
Opening an Account
If you are a rookie, spend time in the simulation mode before depositing real money. A demo account is easy to create — just fill in your basic contact details, and check your inbox. The login and password unlock your trading terminal for training purposes, so you can see how everything works without risking your hard-earned money.
Real trades require a live account. Here, registration is longer, as you need to provide your ID. A CFD broker has to validate your identity and place of residence before opening market access. Some companies will also conduct a credit check before extending your leverage. Treat the intermediary as a banker. After all, they will handle and process all payments into and from your account.
Test Through Demo
A surefire way to get unbiased comparison results is by testing demo accounts. While it is surely time-consuming, you will be sure your conclusions are reliable. This is the best way to explore different brokers’ business practices, and test their platform.
Key Takeaways: Choosing CFD Broker
CFDs are handy financial tools that allow you to benefit from market trends without asset ownership. However, it is not easy to identify the best intermediary. Take time to study all applicable terms, and compare transaction costs. A regulated broker in Africa is vital for traders’ success. Do not trust the hype and avoid rash decisions. Make sure the provider offers fair conditions, convenient software, and around-the-clock support.
source https://www.naijanews.com/2020/06/23/how-to-choose-a-cfd-broker-in-nigeria/
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