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Mianyang China
Experience: Beginner
Platform: Multicharts
Broker: broker: Oanda
Trading: HSI, DAX, ES
Posts: 84 since Aug 2017
Thanks Given: 18
Thanks Received: 10
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Hi, I am trading CFD now with Oanda.
To my understading, a CFD is a trading tool that follows the underline assets, which is of small face value the the under funded can trade the market.
To trade a CFD, you have to read the real market chart it's tracking.
Like in Forex, the broker charges in spread. A decent broker's CFD will move in the same way with it's tracking vehicle.
I have observed many brokers, here's my result:
Oanda is an honest one, their CFDs move in line with the underline assets, the price of their CFD is discounted frome the future contract, so the price is few points lower, but the movement is the same. The Spread of ES (US SPX500) is just 0.5, German(Dax) 30 is 2(Day session), which I think is quite decent.
CMC markets. A good broker, their CFD move the same way with real markets. Spread is higher than Oanda.
IG. IG offers many CFD, usually the index future and the index itself. I observed the cfd of index, the price of CFD does not move in the same way with the index( it's the China 300 that does not move in the same way) so I pass it.
Lmax. Lmax is an Forex exange, you are not trading against it. The CFD on Lmax is provied by third party Liquidity providers such Godman sach, Citi...You know the big names. the spread is not high, for Lmax charges 0.0025% as commision.
FCXM, CFDs not move in the same way with the real contrac (Hong Kong 50, for HSI contract).
Forex.com, spreads of CFDs are too high, observed this mornning(Beijing time), is it because it's a holiday?
Overall I choose Oanda, for it's an honest broker and their spread is not high, and their CFDs move the same way with.
Lmax and CMC are also recommed. I think the actual cost of Lmax is not cheaper than Oanda, for their CFD does have spreads and they also charge commision. CMC provids small face value CFDs.
As for IG, you should make more observation on their CFD, for the China 300 I watched is not a popular one.
I think when trading CFD, watching the real markets data is critical.
The reasons why they offer CFD I think are: 1. The law of large number, most people would lose, this is a plus for the broker; 2.The High leverage makes people more easy to lose, another Plus for the broker; 3. Every trade you make, they earn the spread, that's a fixed income for them, like insurance company cellect a premium, third Plus for the broker; (4). Those bucket shops (not so decent brokers) just adjust the price of CFD against you to make you lose or ban you if you consistent win from them.
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