- Find the best broker for your trading needs
- Compare spreads, fees, and platforms
- Read in-depth reviews and analysis
Contract for difference (CFD) trading is popular because of the low initial investment, the ability to go long or short, and because you can open larger positions than your investment would normally allow with leverage. CFD trading also allows traders to speculate on the price movements of an underlying asset without actually owning the asset. CFD brokers provide traders with the software needed to trade CFDs and offer them leverage to profit from a small amount of capital.
Our guide to CFD trading will explain what CFDs are, how they work, how they are different from traditional investments, and the advantages and disadvantages of trading CFDs. Our team has thoroughly researched and tested over 180 CFD providers, including their regulation, trading costs, trading platforms, level of customer service, education and market analysis to provide the top CFD brokers for traders of all budgets and preferences.
60-90% of retail traders lose money trading Forex and CFDs. You should consider whether you understand how CFDs and leveraged trading work and if you can afford the high risk of losing your money. We may receive compensation when you click on links to products we review. Please read our advertising disclosure. By using this website, you agree to our Terms of Service.
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Broker | Overall Rating | Official Site | Min. Deposit | Max. Leverage | Total CFDs | Share CFDs | Commodity CFDs | Indices | Currency Pairs | Regulators | Compare |
---|---|---|---|---|---|---|---|---|---|---|---|
USD 100 | 400:1 | 930 | 636 | 25 | 36 | 63 | |||||
USD 25 | 1000:1 | 253 | 150 | 5 | 10 | 52 | |||||
USD 100 | 500:1 | 210 | 98 | 0 | 27 | 62 | |||||
USD 0 | 200:1 | 1597 | 1300 | 40 | 23 | 90 | |||||
USD 0 | 500:1 | 5211 | 1892 | 26 | 37 | 57 | |||||
USD 200 | 500:1 | 1744 | 1600 | 22 | 25 | 64 | |||||
USD 0 | 500:1 | 188 | 50 | 14 | 32 | 70 | |||||
USD 0 | 200:1 | 19295 | 13000 | 35 | 80 | 80 | |||||
USD 100 | 300:1 | 1009 | 765 | 22 | 31 | 56 |
Find Your Ideal Forex Broker
Traders looking to trade CFDs on a well-designed mobile app with excellent risk management tools, and those looking for financial instruments seldom found at other brokers, such as vanilla options.
AvaTrades's award-winning app is intuitive and feature-rich, it also offers a specialised application for trading vanilla options, AvaOptions. AvaTrade's spreads are fixed at 0.9 pips on the EUR/USD and no commissions are charged for Forex trading.
AvaTrade is a market maker that operates a dealing desk, which may not suit all trading preferences.
0.9 pips
USD 9
USD 100
With their award-winning mobile app, AvatradeGO, Avatrade stands out as our choice for the Most Innovative Forex Broker in 2023. In addition, Avatrade offers low trading costs, great trading tools, and a wide choice of trading platforms.
AvaTrade is an internationally regulated, beginner-friendly CFD broker offering trading on Forex, cryptocurrencies, commodities, indices, stocks, bonds, vanilla options, and ETFs. The AvaTradeGO app provides one of the best mobile trading experiences: All 1000+ CFD instruments offered by AvaTrade are available in the app, as is the AvaProtect tool, which protects traders from losses for a limited time. Other app highlights include a market trends monitor, zoom function and seamless synchronisation with AvaTrade’s webtrader.
Avatrade single account features some of the tightest spreads for a commission-free account with a 100 USD minimum deposit – as low as 0.7 pips on the EUR/USD. Maximum leverage is set at 1:400 on MT4 and MT5, which include EAs, indicators, scalping, hedging, and provides free access to the integrated Trading Central dashboard for both platforms.
Top-tier regulation and security with licenses from ASIC and CBI among others
Accessible trading with a low minimum deposit of 100 USD
Award-winning mobile trading with the AvaTradeGO app with social trading features
Wide range of assets including unique instruments like vanilla options
Educational material to support trader development and strategy enhancement
Market analysis could be more extensive
Avatrade is a Market Maker and operate a dealing desk which might not align with all trading preferences
Traders looking for tight spreads down to 0.6 pips (EUR/USD), a wide range of promotions and bonuses, and a wide range of trading platforms.
Octa's spreads are some of the lowest in the industry, and its 25 USD minimum deposit means that it's accessible to all traders. It also has a great proprietary trading platform and trading app, which are both user-friendly and feature-rich.
Octa's range of financial instruments is limited compared to other similar brokers.
0.6 pips
USD 6
USD 25
Octa has developed the leading copy trading platform, simple for beginners to understand but with the depth of detail (risk level, drawdown, etc) that more experienced traders will want to see – all in an intuitive interface. Available on the MT4 trading platform, Octa has lowered the threshold to allow beginner traders to profit from the sophisticated trading strategies used by professional traders, using seamless integration in their trading platform.
Octa offers CFD trading on three trading platforms – MT4, MT5, and its own in-house platform, OctaTrader. Tradeable CFDs include 35 currency pairs, gold and silver, energies, indices and 30 cryptocurrencies. Octa offers a wide range of bonuses and promotions. A 50% deposit bonus for each deposit is available, as well as demo contests with cash prizes. Octa always runs contests for traders with live accounts, and prizes include cars, laptops and smartphones. Be aware that all these bonuses have terms and conditions that must be met.
All Octa accounts are market execution and offer commission-free trading with spreads as low as 0.6 pips (EUR/USD). Commission-free spreads this low are only usually achieved by large market makers.
Fast and free withdrawals
Low minimum deposit
Tight spreads
Limited range of assets
Poorly regulated
Traders looking for a wide range of Forex pairs and low trading costs.
Tickmill is a well-regulated broker that offers both MT4 and MT5 and low trading costs on its Pro account, with spreads down to 0 pips (EUR/USD) and commissions down to 6 USD.
Tickmill's trading costs on its commission-free account are higher than other brokers, at 1.6 pips (EUR/USD).
0.0 pips
USD 6
USD 100
Tickmill offers some of the most competitive Forex trading conditions available and has, therefore, earned the Award for Best Trading Conditions in 2023.
Founded in 2014 and regulated by the FCA, CySEC and the Financial Services Authority of Labuan Malaysia, Tickmill has a long history of being a responsible CFD broker with a focus on both experienced traders and serious beginners. Tickmill offers support for both MT4 and MT5 and while trading costs on its commission-free Classic Account are higher than the industry average, Forex trading on the Pro Account offers dynamic spreads down to 0 pips and a 4 USD (round turn) commission – much lower most other brokers.
While Tickmill does not offer share trading or other speciality CFDs such as ETFs, it does offer 62+ currency pairs, 16 indices, metals, bonds, and has recently started offering cryptocurrencies – including Bitcoin, Ethereum and Litecoin.
Tight spreads
Well regulated
Fast and free withdrawals
Limited base currencies
FxScouts uses a hands-on approach, combining detailed and systematic evaluation with expert analysis and practical testing to review each broker thoroughly.
When comparing the best CFD brokers in Malaysia, we:
CFD trading is the buying and selling of CFDs (contracts for difference), financial derivatives that allow traders to speculate on the price movements of financial assets such as Forex, stocks, indices, commodities, and more, without actually owning or taking physical delivery of the assets.
CFDs are contracts between an individual trader and a broker to pay the price difference of an asset between opening a trading position and closing a trading position. For example, if you think the price of crude oil will rise and open a buy position, but the price falls instead, and you close your position, you will make a loss. CFD traders are not concerned with the value of an asset they are trading, only the difference in price between opening and closing a trading position.
CFD trading dates back to the late 1970s and early 1980s when financial derivatives first emerged as a means for traders to speculate on the price movements of financial assets.
CFDs quickly gained popularity among professional traders because they provide a flexible and cost-effective way to trade a wide range of financial assets. In the following years, the development of online trading platforms made CFD trading accessible to retail traders, and since then, the industry has grown rapidly.
The main difference between CFD trading and traditional trading is that when you trade a CFD, you are speculating on a market’s price without taking ownership of the underlying asset. With traditional trading, you take ownership of the underlying asset and may receive dividends.
There are other differences between the two types of trading, some of which give CFD trading an advantage and some of which make it more risky.
CFDs benefit from several features that make them valuable to individual traders:
Accessibility: CFD trading is often more accessible than traditional trading as it requires a smaller initial investment. For example, some CFD brokers have minimum deposit requirements of only 1 USD, which makes it easier for smaller investors to enter the market and start trading.
Leverage: Most CFD trading is leveraged trading, meaning traders only have to put up a small amount of capital to gain exposure to a large trading position. This is accomplished through the use of borrowed funds from the broker. For example, if a broker offers leverage of 20:1, the trader only has to put up 5% of the value of the trading position and can multiply his money 20 times over. Leverage can increase your profits but also significantly increase your losses.
Profit from falling and rising markets: You can use CFDs to speculate that the price of an asset will rise (going “long”) or that it will fall (going “short”). Because CFDs are an agreement to pay the difference in the price of an asset, going short is very simple. You open a “sell” position and close it again once the price has fallen enough for you to profit.
Convenience: You can trade CFDs in many different assets without taking physical delivery, saving on storage, security and transportation costs. For example, you can trade CFDs in gold online and simply profit from price changes in the commodity without worrying about how you will store it securely.
Flexibility: You can close a position anytime during the trading day. That means you can hold a position for as long as you want, be it seconds, minutes or hours. You can even hold a position overnight, although there will be a charge for doing so. Many brokers also offer various options when it comes to trade size, allowing a wide range of traders to access the market.
Ability to hedge: Most people are familiar with the term “hedging your bets” and understand that it involves offsetting risks. Well, it means precisely the same thing in the financial world and is derived from the age-old idea of using a hedge – or fence – as a means of protection. In this instance, you can use CFDs to offset your trading positions by balancing trades in case your beliefs about whether those initial positions are likely to rise or fall prove wrong.
Exposure to a vast range of financial assets: You can use CFDs to gain exposure to thousands of underlying financial instruments worldwide from just one trading platform.
Like any other type of financial trading, CFD trading involves a high degree of risk. Some of the key risks associated with CFD trading include the following:
Market volatility: CFD markets are known for their volatility. Markets are influenced by political and economic events, and sudden shifts in these events can lead to rapid and substantial price movements.
Volatility can widen spreads and costs: Severe volatility in markets or a particular product can cause brokers to widen spreads, affecting the prices paid by the trader when entering and exiting positions, potentially negatively impacting trades and increasing losses.
Leverage: CFD traders can use high levels of leverage to gain access to large trading positions, and while this can magnify potential gains, it can also magnify losses.
Constant monitoring: You must always be alert to possible changes in your position. Market volatility and rapid price changes – which could arise outside regular business hours if you are trading international markets – can cause the balance of your account to change quickly.
Lack of regulation: There are many unregulated CFD brokers in operation, which increases the risk of scams and unethical practices by some market participants.
Liquidity risk: CFD markets can experience periods of low liquidity, resulting in difficulty exiting a trade at an acceptable price.
Lack of ownership: Because you don’t own the underlying asset, you can’t gain from the benefits of ownership, such as the income provided at set periods by shares or bonds (like dividends).
Forex traders should educate themselves on the risks involved in CFD trading and develop a solid risk management plan to mitigate these risks.
Once you have signed up with a broker, you should open a demo account to practice trading on their trading platforms in real market conditions and form a trading strategy.
A trading strategy outlines the rules for entering and exiting a trade and includes creating a risk management plan to prevent high losses. It is crucial to thoroughly research and test a strategy before using it in live trading. There are many different CFD trading strategies, and traders often use a combination of technical and fundamental analysis to inform their decisions.
Some common strategies include:
Creating a successful risk-management strategy takes time, education, and patience, but there are a few simple ways to minimise your risk:
A CFD trading broker is an intermediary between traders and the financial markets. Its primary role is to provide access to a wide range of financial instruments, such as stocks, indices, commodities, and currencies, that traders can buy or sell using CFDs.
The broker also provides traders with the platform, tools, and resources to analyse market trends, place trades, and manage their investments. In addition, brokers offer traders leverage to benefit from larger trading positions with only a small amount of capital. The broker may also provide other services, such as educational resources and customer support.
Below are the most common financial assets you can gain exposure to via CFDs.
Currencies (Forex): Currencies are traded in pairs against each other, such as the US dollar against the euro. There are hundreds of currency pairs available to trade via CFDs. The global market is vast, with around $6.6 trillion traded daily in foreign exchange markets.
Shares: You can buy CFDs in most major global stocks. Like the forex market, the global share market is vast so you can choose from a huge number of highly liquid shares. Listen to our podcast episode to learn more about the difference between trading Forex and share CFDs:
Indices: These provide a representation of an overall market. For example, a collection of different stocks are grouped together, and an average price is taken for all of these stocks, creating the price of the index. Well-known examples include the Dow Jones and the S&P 500 in the US.
Cryptocurrencies: You can trade various popular cryptocurrencies with leverage, from Bitcoin and Ethereum to TRON and NEO. The global cryptocurrency is growing rapidly, but prices are highly volatile, magnifying the potential for large profits and losses. One of the key advantages of cryptocurrency CFDs is that you don’t own the underlying assets, preventing the risk of loss due to a cybersecurity breach. The FCA banned cryptocurrency CFD trading for non-professional traders in 2021.
Commodities: Using CFDs, you can gain exposure to a diverse range of commodities, from oil to gold to copper. Commodities are hugely liquid and are subject to a range of influences, from global supply and demand, to political announcements and the economic cycle.
Bonds: Effectively, IOUs issued by governments, companies and other entities, the bond market, also known as the fixed income market, because of the regular set payments these instruments provide, is another of the world’s biggest financial markets.
Interest rates: You can use CFDs to bet on the future direction of interest rates in a wide range of major global markets. The advantages of interest CFDs include relatively attractive margins of 20% and low spreads compared to other products.
Explore more resources that fellow traders find helpful! Check out these other guides to enhance your forex trading knowledge and skills. Whether you’re searching for the best brokers, educational material, or something more specific, we’ve got you covered:
60-90% of retail traders lose money trading Forex and CFDs. You should consider whether you understand how CFDs and leveraged trading work and if you can afford the high risk of losing your money. We may receive compensation when you click on links to products we review. Please read our advertising disclosure. By using this website, you agree to our Terms of Service.