Another point with which one can have bad experiences are CFD brokers. Fortunately, I only traded once briefly with a dubious CFD broker and quickly closed the account again.
CFD traders report again and again about:
- Spam calls
- Poor execution
- Delayed execution
- Spreads that are too high
- Market manipulation
- Crash of the trading platform
Choosing a CFD broker should be well considered. Be sure to check the provider before signing up. Unfortunately, there are also some dubious websites on the internet that advertise quick profits. A good CFD broker is always regulated and licensed. You will know the dates of regulation at the bottom of the page. Most providers also advertise that they are regulated.
Fraudulent brokers falsify a regulation or simply lie to the customers. Therefore, check the regulation separately. I recommend choosing a well-known CFD broker that has been on the market for several years. Stay away from unknown websites. Beginners are cheated again and again by fake sites.
Criteria for a reputable CFD broker:
- Regulated and licensed broker
- Support for every client
- Large selection of markets
- Favourable trading fees
- No hidden fees
- User-friendly trading platform
- Fast deposits and withdrawals
Caution: CFD trading is more difficult than expected:
The markets are constantly moving and often in ways you didn't think they would. As an experienced trader in Exness mt5 I know that not only the entry into a trade is difficult but also the exit. In the picture below you can see an example of a CFD trade.
The actual target of the trade was slightly higher at about $28 in silver. The entry was made in the larger time frame. The picture above was taken in a smaller time frame. As you can see, after the entry there was a high momentum and the price continued to rise, as the target was higher I stayed in this trade.
However, the market made a correction and I was forced to close the trade with at least a partial profit. A chart formation for a short signal was also formed in the larger time frame. In this trade you can see that more than 50% profit of the trade was given away. This can happen every now and then if the target is not reached or there is a correction.
CFD trading is more difficult than you think, because you have to consider the following points:
- When do I open the trade?
- Where is my target for this trade?
- What do I do if the trade goes against me?
- How high is my risk?
- Where do I close the trade in a loss?
- Do I stay in the trade in case of a correction?
For CFD trading you need a precise strategy with rules. It is best to write a precise rule book with the criteria for trade management. If you always treat the trades differently, you cannot achieve a sustainable result. The goal is to execute a successful strategy over and over again.