CFD Trading for Beginners

Contracts for difference, also known as CFDs, allow investors to speculate on the price of financial markets without taking ownership of the underlying asset. CFDs are also usually traded with leverage, meaning clients can increase their position size (and potential profits), in return for a small deposit. Both characteristics make CFD trading popular with beginners.

This guide explains how to get started trading CFDs. We cover the merits and drawbacks of contracts for difference, beginner-friendly trading strategies, plus the top brokers in 2023. Use our CFD trading for beginners tutorial to get started.

Best CFD Brokers

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    AvaTrade's 1250+ leveraged CFD products span a range of asset classes including stocks, indices, commodities, bonds, crypto, and ETFs. You can speculate on rising and falling prices in the broker’s feature-rich web and mobile platforms with market-leading research tools.

  2. XTB

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    Trade a large suite of 2100 CFDs with ultra-fast execution speeds and 24-hour trading. You can build a diverse portfolio with access to forex, indices, commodities, cryptos, stocks and ETFs. Retail traders also get negative balance protection and zero commissions.

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    Trade over 800 CFDs on popular indices, shares, forex, cryptos and commodities. Clients get premium liquidity and superior execution with servers in leading data centres. Eightcap also offers more choice than most competitors in terms of platforms with MT4, MT5 and TradingView.

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    Trade currencies, metals, energies, indices and cryptos with flexible leverage. 24/5 customer support is available to assist new clients while the MT4 platform comes with free tutorials and user guides.

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    Trade CFDs on Spreadex's diverse list of instruments with leverage up to 1:30 and highly competitive spreads. While this broker's USP is spread betting, the excellent trading terms and range of markets makes it an equally good choice for CFD trading.

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    Pepperstone is a fast and reliable CFD broker with 1250+ assets covering forex, commodities, shares, indices, and ETFs. CFDs can be traded on four leading platforms with a choice of accounts and base currencies. The broker boasts an impressive 99.94% fill rate with no requotes or dealing desk intervention.

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    Trade leveraged CFDs on thousands of global stocks as well as 13 global indices, 80+ forex pairs, and London gold and silver. Leverage is available in line with regulatory requirements.

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    Trade CFDs 24/5 on popular markets including forex, commodities, indices, stocks and bonds. IC Markets offers deep liquidity, raw spreads and high leverage.

  9. XM

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    Speculate on rising and falling prices with leveraged CFDs spanning popular markets, including currencies, equities and commodities. Traders get very low fees and high-quality market insights to support CFD trading.

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    CFDs are available on a breath of underlying assets, including stocks, indices, commodities, forex and cryptos. High leverage up to 1:500 is available alongside a 0.01 minimum lot size and award-winning software. For the tightest spreads from 0 pips, opt for the Premium account.

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    Go long and short on a range of popular financial markets with intuitive platforms and reliable execution. 99.76% of trades are executed in less than a second with an average speed of 0.02 seconds.

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    Trade a huge selection of CFDs with more than 12,000 assets and very high leverage up to 1:2000. Micro lot trading is also available with access to interbank liquidity providers for low fees.

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    LQDFX offers a modest collection of CFDs covering currencies, metals, stocks, indices, commodities and cryptos. Traders can go long or short with real-time quotes and a choice of live accounts to suit different trading strategies.

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    Trade leveraged CFDs on over 1000 assets with low-cost spreads. You can also take advantage of the broker's integrated signals to help you determine when to enter and exit positions.

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    IG offers an impressive suite of 17,000+ CFD instruments. Negative balance protection ensures accounts cannot drop below zero while custom price alerts and the IG Academy enhance the trading experience.

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    Trade CFDs on over 3,000 assets and enjoy rich market data through integrated TradingView charts. There is also comprehensive free learning tools via the eToro Academy, ideal for beginners. Fees are low and leverage is in line with regulatory requirements, helping to provide a secure trading environment.

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    Trade 5,000+ CFDs from a single account with no hidden fees and free live market data. The suite of markets is impressive vs alternatives, including access to shares, indices, commodities and bonds.

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    FxPro offers thousands of CFDs on forex, commodities, indices, shares and futures with 24/5 multilingual support. Traders also benefit from low latency datacentre co-location.

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    Plus500 offers commission-free CFDs on a huge range of markets, including currencies, stocks, indices and commodities. Traders can go long or short on popular assets with flexible leverage and no hidden charges. The WebTrader platform has been specifically designed for trading CFDs.

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    Trade CFDs on forex, metals, energies, shares, indices and cryptos with transparent prices. High leverage up to 1:500 is available and there are no account opening or deposit fees.

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    FXTM's CFD list includes forex, stocks, commodities and indices. The global entity also offers crypto CFDs. Leverage depends on jurisdiction, with rates up to 1:30 from its CySEC-regulated branch and a massive 1:2000 from its global entities.

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    Trade CFDs on hundreds of instruments including forex, equities, commodities, indices and cryptocurrencies with fixed or variable spreads and no commission charges. The CFD trading environment is intuitive and secure.

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    Access highly leveraged CFDs across forex, commodities, indices, stocks and bonds with 24/5 customer support. Build a diverse portfolio with hundreds of CFD assets.

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    CFDs are available on forex, stocks, indices and crypto assets, with support for MT4 and a VPS service allowing for 24/7 automated trading. NordFX offers very high leverage up to 1:1000 for the least volatile forex pairs, providing opportunities for experienced traders.

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    IQCent CFDs are available on forex, indices, commodities and cryptos with leverage variable by asset to a maximum of 1:500, which is higher than many alternatives. 24/7 customer support is also available to assist new users.

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    rating full offers an excellent variety of CFDs covering popular asset classes. Margin rates are competitive and the educational resources compare well to rivals and will appeal to beginners.

  27. Axi

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    Trade CFDs with dynamic leverage on a multitude of markets, including forex, shares, indices and commodities. Raw spreads are available from 0 pips rivalling leading competitors.

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    Access CFDs spanning several key markets, with tight spreads and reasonable commissions at $6 per round turn. High leverage up to 1:500 is available alongside 24/7 support, plus rapid deposits and withdrawals.

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    Traders can speculate on 1000+ financial markets with high leverage up to 1:500. You can bet on rising and falling prices in currencies, commodities, indices, shares, and more without owning the underlying asset. With the comprehensive choice of CFD trading platforms, users can also switch between desktop, web and mobile for a seamless trading experience.

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    VT Markets offers CFDs on an extensive list of assets including stocks, ETFs, indices and commodities. Traders can access leverage up to 1:500 and trade with liquidity from top-tier providers. CFDs are available on a choice of reliable platforms, including MetaTrader.

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    Trade CFDs across four asset classes with leverage up to 1:1000. Beginners can also take advantage of the broker's useful technical analysis guides and CFD education, plus 24/7 in-platform support via live chat.

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    Traders can access CFDs across forex, indices, commodities and stocks. I was able to employ automated and scalping strategies in both MetaTrader platforms, and I think experienced CFD traders will appreciate the range of free trading tools on offer, including a custom price ticker.

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    FXTrading offers CFDs on a wide range of assets, including forex, stocks, commodities, indices and cryptocurrencies. Commodities include a selection of softs as well as metals and energies, and the eight indices offered include the US30, US500 and UK100. Flexible leverage is available with excellent risk management tools.

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    Trade CFDs across indices, metals and even IPOs with flexible account types and leverage up to 1:1000. You can choose between two excellent platforms with a range of technical indicators and fundamental analysis features.

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    ThinkMarkets offers CFDs on a good range of instruments, the most extensive being stocks and ETFs with 3500+ assets, as well as indices and commodities, amongst others. Leverage is available up to 1:30 in the EU and UK, while clients of the offshore branch can access up to 1:500 leverage.

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    M4Markets offers CFD trading on popular asset classes, including stocks, indices, currencies, commodities and cryptocurrencies. Leverage up to 1:5000 is available, which is among the highest of any broker we have evaluated.

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    SuperForex offers CFDs on a good range of assets, though it only really shines when it comes to forex, thanks to its very diverse list. On the other hand, the significant leverage available on most assets increases profit potential, though traders will need to watch out for spreads, which compare poorly to some competitors.

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    Access over 2,000 CFDs across diverse markets including indices, commodities and bonds. There is also premium daily analysis and strategy resources for savvy traders.

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    Videforex CFDs are available on forex, indices, cryptocurrencies and commodities with up to 1:500 leverage and tight spreads from near zero. CFDs incur a commission fee of 1%–2.5% and up to 5% for leveraged trades.

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    IronFX's asset list of 300+ instruments including forex, stocks, commodities and indices are traded via CFDs. Spreads are floating and vary by account type, and maximum leverage from 1:30 to 1:1000 is available depending on your account location.

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    Ingot Brokers offers CFD trading on 1000+ instruments including stocks, commodities and cryptocurrencies with floating spreads starting from zero and excellent execution via the MT4 and MT5 platforms. The broker also offers 24/5 customer support via live chat and email and takes strong security measures including KYC checks and segregated accounts.

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    Trade a range of CFD instruments on one of FXCM's multi-asset platforms with fast execution and zero/positive slippage. Daily market analysis can also be used to inform trading decisions.

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    Scope Markets clients can trade CFDs on a good selection of asset classes including forex, precious metals, energies, indices and global shares. The award-winning broker also offers a decent suite of educational materials and a YouTube channel to support aspiring traders.

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    Dukascopy offers highly leveraged CFDs with rates up to 1:200. A wide selection of asset classes are available, including currencies, equities, commodities, ETFs and cryptos. Spreads are also tight starting from 0.1 pips and traders get 24/7 support.

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    Trade CFDs on forex, stocks, indices, commodities and cryptos with high leverage up to 1:500 on the no-commission ClassiQ account. The raw spread account options have low commissions from $4 round-turn and offer lower maximum of leverage of 1:200 or 1:400, which is still competitive.

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    Trade 200+ CFDs with leverage up to 1:1000 on a powerful proprietary platform. Asset classes include stocks, forex and crypto with ECN execution. You can bet on rising and falling prices with leveraged CFDs.

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    Rock Global offers low-price CFDs on forex, shares, indices and commodities. The broker charges zero-commission trading on commodities and indices, and zero-spread, commission-only trading on shares. Leverage varies by instrument with 1:200 available on indices and 1:10 on blue-chip stocks.

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    ForexChief offers a competitive range of CFDs, encompassing crypto, indices, energies and metals. A clear pricing schedule is available to clients with no hidden charges. Traders can also access very high leverage up to 1:1000.

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    CFDs are available on popular asset classes with a competitive $1 minimum deposit. The broker offers very high, unrestricted leverage of 1:1000, which will amplify both profits and losses.

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    Trade CFDs on forex, indices, stocks, commodities and cryptocurrencies with leverage up to 1:3000. Swap-free trading is available, and all account types trade with competitive spreads and are commission-free except the Go Pro account, which charges a $7 round-turn commission.

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    Focus Option offers CFD trading through an intuitive mobile app, with 300+ tradeable instruments spanning forex, cryptocurrencies, commodities, shares and indices. Leverage ranges from 1:20 to 1:50 and spreads are variable, starting from 1 pip, with no commission.

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    Trade CFDs on forex, stocks, metals, energies, indices, cryptos and dollar futures. Sage FX offers tight spreads and high leverage on all instruments from 1:100 to 1:500.

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    Access thousands of CFDs with competitive pricing and leverage up to 1:500. A range of asset classes are available, including currencies, shares, indices, metals and commodities. CFDs can be traded on the market-leading MetaTrader platforms.

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    PU Prime offers CFD trading on hundreds of shares, as well as indices, commodities, bonds and cryptocurrencies. The leverage available varies by asset, and spreads also vary greatly between instruments and account types with the tightest near zero and the widest in the hundreds of pips. Stock, index, commodity and bond CFDs are traded on the leading MT4 platform.

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    Go long or short on over 170 CFDs with high leverage up to 1:500. The broker's social community is also a great place to pick up CFD strategy tips and trading ideas.

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    Errante customers can trade stocks, indices, commodities and cryptocurrencies with leveraged CFDs. The level of leverage available depends on regulatory oversight, with 1:30 the maximum allowed in the EU though this varies by asset.

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    World Forex's leveraged CFDs are available on a modest suite of 100+ instruments, including stocks, commodities and forex. Very high leverage up to 1:1000 is available for account balances up to $1000, with lower levels available to accounts with higher balances.

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    CFDs are available on hundreds of markets including forex, indices, shares and commodities. Traders can go long or short with reliable trading tools, excellent market research and transparent pricing.

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    Swissquote offers spot, forward and synthetic contracts on a breadth of markets, including stocks, indices, bonds and commodities. The pricing model is transparent with no hidden fees. Clients can diversify portfolios and hedge risk with low margin requirements.

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    Trade CFDs on forex, stocks, metals, energies, cryptos and indices with high leverage up to 1:1000 on major currency pairs, 1:200 on metals, 1:100 on indices, 1:33 on stocks and energies, and 1:5 on cryptocurrencies. The range of 200+ instruments is not the biggest on the market, but the variety of asset classes provides flexible trading options for most traders.

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    FP Markets' CFD trading covers a range of markets, including 10,000+ equities, indices, commodities, cryptocurrencies and ETFs. Spreads are tight and traders get fast execution speeds.

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    AdroFX offers a good suite of CFDs on stocks, cryptos, indices and commodities, with high leverage up to 1:500. CFD trading is done through the reliable MT4 platform, while a separate Allpips platform is available for copy trading.

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    Core Spreads offers CFD trading on 40 forex pairs plus 13 commodities, including metals and energies, and 13 global stock indices including the UK100 and US30. CFDs are traded through the MT4 platform with leverage up to 1:30 in line with UK regulations.

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    Anzo Capital clients can use MetaTrader 4 and MetaTrader 5 to trade CFDs on stocks, equity indices, crude oil and precious metals with competitive price levels.

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    HYCM traders can access CFDs on a range of stocks, indices, commodities and ETFs with floating spreads and maximum leverage varying by instrument. Clients also have a choice between two industry-leading platforms.

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    Global Prime offers CFD trading opportunities on 150+ global markets including forex, indices, commodities, cryptocurrencies and bonds. Spreads are tight with a raw ECN account available starting from zero.

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    Fortrade's list of leveraged CFDs covers a wide range of asset classes including forex, stocks, bonds, indices, commodities and cryptocurrencies. Traders can access leverage up to 1:30 and will trade with zero commission, fast execution and low latency on MetaTrader 4 or the bespoke platform.

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    Hantec Markets clients can access CFD trading on a very wide selection of currency pairs and stocks as well as commodities, bonds, indices and crypto assets. Spreads start from near zero and the trading platforms offered will suit trader of all experience levels. Leverage is capped at 1:30 for UK and EEA traders but rises to 1:1000 for clients of the offshore firm.

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    BlackBull Markets CFDs are offered on forex, stocks, indices, commodities and cryptos with tight spreads and high leverage. The ECN accounts offer fast execution and low slippage, and the broker provides traders with plenty of extra tools and features plus 24/7 customer support.

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    FXOpen offers CFDs on multiple assets including forex, stocks, commodities, indices, cryptocurrencies and ETFs. Leverage and spreads vary by instrument, with spreads starting from zero and fast order execution.

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    Libertex's list of CFDs covers a decent range of tradeable underlying assets, but there isn't much depth with only around 250 in total. Leverage up to 1:30 for retail clients is available in accordance with CySEC regulations, and traders can choose between three excellent trading platforms. Best of all are the tight spreads available on all markets and the zero commissions on investments in stocks.

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    Trade CFDs on forex, stocks, indices, commodities, ETFs, bonds and cryptocurrencies with variable leverage up to 1:30. The broker provides great value to traders with six free trades per day on US, UK and European stocks, tight spreads on forex and low commissions on ETFs.

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    Trade CFDs on a broad range of asset classes including forex, energies, precious metals, company shares, indices and cryptos. The excellent trade execution and opportunity to trade with direct market access pricing sets this broker apart from rivals.

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    Trade CFDs on forex, stocks, commodities and indices with tight spreads and leverage limited to the FCA-sanctioned maximum of 1:30. Infinox traders benefit from lightning-fast execution speeds and a choice between STP and ECN pricing, making this a flexible option for beginner and serious traders.

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    Trade CFDs on forex, indices, metals, oil and cryptocurrencies with high leverage up to 1:500 and competitive spreads, with the choice between zero commission or raw spreads.

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    Trade CFDs on 75+ instruments, including forex, energies, metals, and indices with variable leverage up to 1:500 on major pairs, 1:200 on minors and exotics and 1:100 on commodities and energies.

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    OspreyFX offers leveraged CFDs on forex, commodities, stocks, cryptos and indices. Deep liquidity is available from 50+ providers with a competitive ECN account that will suit active trading strategies, including scalping.

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    Trade a decent range of markets via CFDs, with commissions of $6 per lot. There is also a reasonable $10 minimum deposit and 24/7 customer support for new traders.

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    Trade all markets via CFDs, with retail leverage up to 1:30. With the RStocks Trader account, clients can access over 12,000 CFDs with algorithmic analysis tools and intuitive charts.

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    Trade flexible CFDs on forex, commodities, indices and cryptos with tight spreads, fast execution, micro-lot trading and leverage up to 1:500. There are also no restrictions on trading strategies.

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    EZ Invest offers leveraged CFDs on popular asset classes, including forex, stocks, indices and commodities. Execution speeds are decent but a large deposit is needed for the best pricing conditions.

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    Saxo Bank offers a secure and reliable way to trade 8,800+ CFDs spanning forex, stocks, indices, commodities, options and bonds. The broker's extra features include a trading academy, powerful charting and analytical tools and trading signals, helping it stand out from many alternatives.

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    Access a modest range of CFD instruments across key markets, including indices and commodities. Clients can trade directly from charts with high leverage up to 1:500 and customisable time intervals.

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    You can take positions on a range of popular trading markets including forex, stocks, energies and metals. Leverage is high at 1:500 and live spreads can be viewed in the web-accessible platform and app.

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    You can speculate on popular financial assets covering forex, commodities, indices, metals and bonds. You can get started with $0 minimum deposit, making the broker a good pick for beginners. There’s also a comprehensive range of technical analysis tools in the MT4 and OANDA Trade platforms.

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    Trade CFDs on 100+ instruments from popular asset classes. Leverage up to 1:200 is available on precious metals, while stocks, indices and energies can access 1:20 max leverage and 1:10 for commodities. On the negative side, the depth of assets is limited vs other CFD brokers.

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    With CFDs on 20+ Polish and 30+ US stocks, as well as energies and seven global stock indices covering US, UK, European, Australian and Japanese markets, Just2Trade offers a superb selection of global assets.

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    Trade commission-free CFDs on 3000+ instruments from forex, stock and commodities markets with volumes starting from 0.1 lots, a low minimum deposit of $10 and tight floating spreads. The selection of CFDs beats most competitors.

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    Trade CFDs on forex, commodities, indices and crypto assets. With spreads from 0 pips and generous incentives and bonus offers setting Vault Markets apart from competitors, this Namibian broker will appeal to aspiring traders.

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    Trade CFDs on forex, stocks, indices, energies and metals with fast execution and variable leverage. Spreads are tight and commission-free trading is available on some assets.

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    Trade CFDs on an array of assets with ultra-low spreads

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    Trade leveraged CFDs on thousands of instruments, including forex, equities, commodities, indices, bonds and futures. The selection of asset classes is decent, but the trading software, particularly the mobile app, lags behind competitors.

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    CMC Markets offers leveraged CFDs on an extensive list of 12,000+ instruments with transparent pricing, powerful trading software and ultra-fast execution speeds. Out-of-hours trading on CFD indices is also available, plus 24/5 award-winning customer support.

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    Trade leveraged CFDs in a range of financial markets.

CFD Trading Basics For Beginners

CFDs are placed using the trader’s understanding of the market, and the trader is hoping that the price of the underlying asset will rise or fall so that the position can be sold for a profit. Investors make money from the difference between the buy price and the sell price.

Because CFDs are leveraged products, there are also financing costs that must be paid on the borrowed funds that the broker provides. The formula to work out your returns when CFD trading is:

Closing sell / buy price – initial buy / sell price – (interest x number of days) – transaction costs = profit/loss

Importantly, CFDs are different from shares because there is no yield, so you can only make money from the transaction itself. This is because CFDs are a derivative – the trader does not actually own the underlying asset, for example a UK stock or gold. Instead, traders simply speculate on the price.

CFD trading for dummies pdf

Credit: Skilling

Trading On Margin

Margin trading refers to investing a percentage of the total cost of an asset, and having the rest lent to you by a broker. This allows traders to take on bigger positions when they don’t necessarily have big capital to invest. The percentage paid by the investor is determined by the broker, regulatory requirements, and the asset traded, but typically it’s between 5% and 20% of the total position size. If the market moves in the way you have predicted, you can keep the return, and pay the same amount of money back to the broker (minus any fees).

Importantly, most FCA-regulated brokers cap leverage to 1:30 for retail traders. As outlined above, margin trading opportunities also vary depending on the asset traded, with most brokers offering lower leverage rates on volatile markets like cryptos.

Let’s look at an example of a leveraged CFD trade:

If you are looking to buy a share in a company that costs $200, and your broker offers CFDs with a 20% margin, then you are able to buy one share for $40 while your broker lends you $160. If your position is closed when the share price is $250, then you return the same $160 to your broker, get your $40 investment back, and also get the additional $50 from your trade. Subtract any fees, and that is what you are left with.

CFD trading strategies for beginners pdf

Credit: CMC Markets

The downside of margin trading is that the borrowed money always needs to be returned to the broker, even if the market moves against you. As a result, leveraged CFD trading can lead to large losses if a careful approach to risk management isn’t taken. Fortunately, many of the best CFD brokers offer negative balance protection, meaning you cannot lose more than your account balance.

How To Start CFD Trading

The first decision is which broker to sign up with. A useful tip is to find a brokerage that offers a free demo account. This will let you practice trading CFDs with virtual funds and gives you the opportunity to find a strategy that works, without risking your own money. You can then upgrade to a real-money account when you feel confident.

Here are a few other things to keep in mind when choosing a CFD broker:

What Are The Fees?

Brokers don’t tend to charge sign-up fees for CFD trading accounts. This is because platforms often make their money from spreads, commissions and margin losses. All of these costs should be compared. It’s also worth checking for deposit and withdrawal fees, plus hidden charges like account inactivity penalties.

Is The Platform Beginner-Friendly?

Some platforms are not suitable for CFD trading beginners. One terminal that is, however, is MetaTrader 4. MT4 is offered by many of the top brokers and provides a user-friendly interface alongside a decent breadth of analysis tools. Users benefit from 3 execution modes, 2 market orders, 4 pending orders, 2 stop orders and a trailing stop. Multiple charting views, including basic candlestick charts, are also provided.

MT4 is available as a software download, browser terminal, plus via a mobile app. And because it’s so popular, there is a wealth of guides and tutorials online to help beginners get started.

Are They Reliable?

Unfortunately, not all CFD brokers can be trusted. This is why it is important that British traders sign up with a brokerage regulated by the Financial Conduct Authority (FCA). This will provide new traders with several benefits, from negative balance protection and segregated client accounts to a ban on misleading promotions and a cap on trading leverage.

CFD Trading Strategies For Beginners

When looking at trading CFDs for beginners, there are two basic approaches for novices to get familiar with:

Long Buy

A long buy position is taken when you believe the value of an asset will rise. Let’s say you think the value of oil will increase following supply and demand challenges caused by the Russia-Ukraine war. A long CFD position could see you generate a return if the price increases beyond its current value.

Note, when we refer to buying, we are referring to opening the position, which does not actually mean you are purchasing the underlying asset (barrels of oil). What you are purchasing is a contract that allows you to exchange the difference in price between when you open the contract and when you close it.

Short Sell

The short sell might appear to be the more complicated strategy for CFD trading beginners, but the best way to look at it is as a reverse long buy. When you short sell, you borrow the asset in order to sell it, before buying it back at a lower price further down the line. This is done when you believe that the value of the underlying asset is going to decrease.

So, if you believe that the value of Bitcoin will decline, then opening a short position with a CFD could lead to a profit. If the price of BTC does indeed drop, then you will make money equivalent to the difference in unit price at open compared to the current price, multiplied by the size of the position, minus any broker fees.

Strategies for CFD trading for beginners

Credit: IG


Having a basic strategy is a great place to start as a beginner to CFDs. But unless you continue to consume relevant material and commit to learning, you may see limited returns. We recommend setting aside time every week to get better acquainted with CFDs through the following:

  • Books – Books are one of the best ways you can immerse yourself in CFD trading. There are lots of great CFD trading books out there that come in the form of eBooks, audiobooks and physical copies, and many are specifically aimed at beginner traders. Content can cover everything from leveraged trading to risk management.
  • Courses – Courses are a great alternative to reading website content about CFDs or watching YouTube videos. Many courses are enough to help you progress from the beginner stage of CFD trading towards more advanced strategies and setups. Find a course from a highly rated provider that aligns with your budget. Note, some leading CFD brokers also offer free trading academies and tutorials when you open an account.
  • Online Community – Beginners can also turn to active investing communities available on social media channels and trading forums. Another great place to start is copy trading platforms. These applications allow traders to engage with experienced investors while mirroring their positions and strategies.

CFD Trading Tips For Beginners

It can be daunting to start trading with CFDs as a total beginner, however, with a supportive broker and the right mindset, it is possible to make money. We have also compiled a list of tips for CFD trading beginners.

Setting Up

One of the most important things to do before opening any positions is to research the market and confirm your predictions with technical and fundamental analysis. Also make sure you utilise stop-loss and take-profit orders to protect potential profits and limit any losses.


When you start out, it’s easy to listen to a gut feeling or give in to emotions like fear or greed. However, this can derail an effective strategy and dampen the trading experience. Try and stay disciplined and follow your original approach. You can then review your progress and amend your trading system after it has run its course.


Finding a CFD broker might seem more like a formality than an important decision, but it can have a significant impact on your trading experience. Brokerages offer access to different markets with various fee structures, leveraged trading opportunities, supporting tools and more.

With this in mind, sign up with a reliable brand that comes recommended. Use our list of suggested brokers to start on the right foot.


The leverage aspect of CFD trading can make investing risky. Beginners may not want to use all the leverage offered by an online broker. It’s also worth testing trading on leverage in a demo account before investing real money. This will help you understand the impact leverage can have on potential profits and losses.

Note, many of the top CFD brokers will lower your available leverage if you contact their support team.

Bottom Line On CFD Trading For Beginners

CFD trading for beginners can be a lucrative way to get into investing in the financial markets. Traders make a simple prediction on the value of an asset without actually taking ownership of the stock, precious metal or currency, for example. Trading on margin also means novice investors can get started with a relatively small capital outlay.

Use this beginner-friendly guide to trading CFDs to get started today and check out our list of recommended brokers here.


What Are CFDs?

CFDs are contracts between an investor and a financial broker where both parties agree to exchange the difference between the opening price and the value of the asset when the contract is closed (minus any fees). CFDs are usually traded with leverage, meaning clients only need to put down a small amount of the total position size.

What Markets Can CFDs Be Used To Speculate On?

Novice traders can use contracts for difference to speculate on a long list of markets, from equities and commodities to forex and cryptocurrencies. Market access varies between brokers so make sure you check out reviews and ratings before opening a live account.

It is legal to trade CFDs in the United Kingdom. However, not all online brokers and trading platforms are regulated by the country’s financial watchdog –  the Financial Conduct Authority (FCA). Trading CFDs with a regulated firm normally provides retail investors with better trading conditions and greater customer protection.

Can You Make Money With CFDs?

Trading CFDs can be profitable, but it can also lead to large losses. The leverage element, in particular, makes contracts for difference a risky product. That’s why beginners may want to start with a demo account to build up their market knowledge and confidence.

Is CFD Trading Good For Beginners?

CFDs appeal to beginner traders for several reasons. Firstly, most brokers offer leveraged CFD trading, so investors only need to deposit a small amount of the total position, usually between 5% and 20%. CFDs are also a derivative, meaning traders don’t actually take ownership of the underlying asset, for example a precious metal like gold or silver. CFDs are also available on a wide range of traditional financial markets, plus new markets like cryptocurrencies.