CFD brokers give you leveraged exposure to markets without owning the underlying asset. You deal on price movements across forex, indices, commodities, shares, ETFs, even crypto in some regions. The broker sets margin, quotes prices, handles execution, and carries your account risk inside a legal entity governed by a regulator. That one sentence hides most of what you need to check: who the legal counterparty is, how they make money, how they route orders, how they treat client cash, and how fast they pay out. If you sort those five, the rest becomes routine.
What a CFD actually is and why broker structure matters
A Contract for Difference is a cash-settled agreement between you and the broker to pay the difference between the entry and exit price of an instrument. No delivery of oil barrels or share certificates. Because settlement is bilateral, you care a lot about the broker’s balance sheet, segregation of client money, and the exact license you’re trading under. The same brand can run several entities; one might be under a strong regulator with strict client-money rules, and another might be a lighter offshore setup aimed at higher leverage. Read the account agreement to see which entity name appears on your statements and where client funds are held. If that name changes across pages or emails, stop and re-verify before sending a cent.
Execution models without the buzzwords
You’ll see talk of market maker, STP, ECN, DMA. Ignore the debate and measure what hits your ticket. A broker that internalizes flow can still deliver fair prices if it runs deep books and keeps spreads tight when markets go quiet or manic. A broker that passes orders to outside liquidity can still slip you if their risk controls are slow or the feed is thin. The test is slippage distribution over your own trades: you should see both positive and negative slippage, with a balance that makes sense for volatile and quiet periods. If almost every order skids the wrong way while positive slippage is a unicorn, pricing is stacked against you.
Costs you actually pay, not just the headline spread
Costs show up as spread, commission, swaps, overnight financing for equity and index CFDs, conversion charges when your account currency differs from the product’s currency, market data fees on some share CFDs, funding and withdrawal fees, and the silent cost of wider spreads during rollover or news. Many traders obsess over a 0.1 pip difference in EURUSD then hand away more in financing on index positions held for weeks. Build a simple tracker: net cost per million for forex; cents per contract for indices; basis points per day for financing on shares. After a month you’ll know which broker is cheaper for your style instead of guessing from a banner.
Platforms, tools, and actual reliability
Most brokers offer MT4 or MT5; many add cTrader or TradingView integration; some have their own web or mobile platforms with decent charting and depth windows. Stability matters more than shiny skins. You want predictable maintenance windows, clean order staging with price protection, partial fill logic that behaves, and server-side stops that trigger when your internet hiccups. If you automate, test with your real VPS location and throttle settings. If you use custom indicators, confirm they don’t delay order sends or chew CPU at rollover. The best platform is the one that doesn’t become the story on a busy day.
Leverage, margin policy, and how accounts differ
CFD accounts are usually split into standard spread-only and raw-spread plus commission. Raw plus commission often wins for active traders because the spread is closer to the true feed. Leverage caps vary by region. The headline ratio is only part of it; read how margin changes at size, around earnings for share CFDs, into weekends for crypto, or near key events for indices. Some brokers hike margin or switch to close-only mode with little notice. Know the stop-out level, whether they use last trade or bid/ask for margin checks, and whether they offer guaranteed stop losses on certain products. A guaranteed stop costs a premium but caps gap risk, which is worth it for news plays and single-stock trades.
Funding, withdrawals, and account hygiene
Good brokers keep funding boring. Deposits land fast through cards, bank rails, or trusted wallets. Withdrawals go back the same route to the same name and arrive inside the stated window. Name mismatches, recycled devices, or sudden changes in location are classic triggers for manual reviews, so keep your KYC clean and your operational habits steady. Before you scale, run a small end-to-end test: deposit, open and close tiny trades, then withdraw. Time the cycle and keep screenshots of every step. If support waffles or switches channels at cash-out time, move on.
Share, index, and commodity CFDs: quirks that bite later
Share CFDs mirror corporate actions. Dividends get credited or debited as cash adjustments; taxes can apply based on instrument and your account setup. Index CFDs reflect net dividends and funding across the basket; the overnight rate is where many traders pay more than they think. Commodities roll on exchange schedules; if your broker quotes a continuous contract, confirm how they adjust for the next month so your chart and P&L don’t jump on roll day. Crypto CFDs, where offered, often carry weekend hours and wider spreads; position limits and sudden margin changes are common. Read the product schedule for each symbol you trade, not just the front page spread sheet.
Research, education, and service that actually helps
Quality research explains setups in plain language, shows scenarios on both sides, and ties risk to actual levels on the instrument you trade. Education that teaches position sizing, swap math, and event risk is worth more than fireworks on social media. Support should answer detailed questions about order handling, symbol specifications, and corporate action treatment. Ask a pointed question and see if you get a straight answer or a copy-paste. Keep the email. When things go wrong, a clear written record saves time.
Picking a broker with a process, not hope
Start with regulation you trust for the size of money you intend to trade. Shortlist a few entities you can legally use with account currencies that suit your funding rail. Open two live accounts: one standard, one raw if available. Trade your plan at tiny size for four weeks on both. Log spreads, slippage, financing, rejects, and platform wobbles during your actual hours. Trigger at least one withdrawal on each. Compare realized net cost and friction. Keep the better one; keep both if they each win on different products. Close the rest. This beats reading endless reviews and guessing who fits you.
Risk rules that keep CFD trading sane
Decide risk per trade and a daily stop that logs you out. Use server-side stops. Avoid martingale tricks that look clever until a trend day arrives. Hedge only if you’ve priced the carry, not to soothe nerves. Take platform screenshots on outliers, good or bad; patterns appear. Pull profits out on a schedule, not on a whim, so trading capital doesn’t creep up just because a month went well. And yes, sleep still beats staring at a flashing five-minute chart at 2am.
Red flags that deserve a hard no
A broker can’t show a current license and legal entity for your country. Prices lag public charts by a mile. Every fill skids the wrong way while positive slippage never shows. Funding is instant but withdrawals “need compliance review” for days without a clear reason. Support pushes bonuses with turnover traps. Complaints process is a dead end or points to a mailbox. Any one of those is enough to walk.
Simple FAQ that clears up most questions
Are CFDs suitable for long-term investing? They can mirror long exposure, but financing costs stack up if you hold for months. If you want to own a stock or ETF for the long haul, a cash account with a custodian is usually cheaper.
Can I get guaranteed stops on all symbols? Usually only on select indices and large-cap shares. Read the ticket fine print; guaranteed stops cost extra and must sit a minimum distance from price.
Why do my weekend crypto positions show different margin? Many brokers tweak margin and limits over quieter liquidity, then revert on Monday. That’s risk control, not a bug, but you should plan for it.
How big should I fund an account to start? Big enough to run your plan with sensible position sizes while keeping daily risk tiny. Small enough that a worst-case month doesn’t hurt your life. Then scale only after you’ve run the deposit-trade-withdraw cycle cleanly.
Do raw accounts always win? Not always. If you trade rarely and hold overnight, the financing rate and dividend treatment may matter more than the spread you see at entry.
A closing note on taxes and records
CFD profits are usually taxable as income in many countries. Keep monthly statements, trade histories, and funding records. Reconcile to your bank or wallet statements and store everything in one folder per year. If you size up or start mixing multiple brokers and products, consider a simple ledger so tax season doesn’t become detective work.
CFDs reward boring habits: verify the entity, test live with small money, measure your own costs, withdraw on schedule, and shut the platform when your line in the sand is hit. Do that and the broker becomes infrastructure, not a character in your trading story.