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Forex and CFDs are one of the ways anyone interested in online trading can reach every corner of the market. While usually traders need to contact big stock brokers and banks if they want to speculate on stocks and other financial assets, forex and CFD brokers offer a good alternative to gain access to the market without the need to have a huge starting capital and without high fees some brokerages request.
Now trading financial instruments based on prices of underlying assets is easy with web based platforms and low minimum deposits offered by licensed forex and CFDs brokers. We have compiled a list of those we consider best and ranked them for you! Visit the website or read the review below.
If you want to trade any asset, it is broker’s job to ensure you can execute orders to buy and sell on the market. For this, the broker will take a fee. With derivatives, like forex contracts and CFDs, trading is executed over online platforms and online brokers. Since these derivatives do not require possession of the assets, online brokers can offer easy and fast access to anyone, and more importantly, with much lower prices. Forex and CFDs broker is a company that uses online market infrastructure to offer its customers – traders, to trade forex contracts and contracts for difference (CFDs).
In order to start trading, customers will have to create an account. The registration is painless and free. Usually brokers also offer account creation through Facebook, so there isn’t even need to type in all your personal info. After the account was created, trader can see the platform and other parts of the user control center. All forex and CFDs brokers offer a no deposit demo account traders can use before opening a full live account.
If the trader wants to trade real money immediately, she needs to deposit funds first on the trading account of the broker. This account with the broker holds the money that will be used to execute trades.
To learn more about the forex and CFDs as financial instruments, please visit FairForexBrokers.com Forex & CFDs page.
Generally, one can start trading already with the minimum deposit, which varies between brokers, but can start as low as $10. However, in order to get a more complete service, it pays to take a look at premium accounts which bundle a set of interesting trading services like premium support, personal account manager, trading recommendations and signals, upgraded bonus features, additional market research daily and more. These accounts can start from $500 and go over $20000 in some cases. They are usually called “silver”, “gold”, “platinum”, “diamond” and so on to indicate they command better service than the basic accounts. In some cases, they bring more leverage, lower fees or faster withdrawals.
The deposit itself is done through the platform. Obviously, the trader will select the option to deposit money onto the trading account and then choose the amount and the payment method. fastest and cheapest payment methods are the e-wallets, like Skrill and Neteller and Paypal., while one can also use classic payment methods like bank wire or credit and debit cards.
As mentioned, minimum deposit with forex and CFDs brokers depends on the broker. Some brokers, like XM have minimum deposit of $5, while others are mid-range of $100, like Trade.com. With AvaTrade it is $100, however there one can trade and use social trading platform. This seems to be the trend lately. Many brokers are integrating all kinds of instruments into their platforms.
Demo account is a special type of the account where, most of the time, traders do not need to deposit any money in order to test the platform. One simply selects the “demo” option when creating the account and soon she can trade on a real platform, but with virtual money. This money is not real so it cannot be paid out, however, the experience is real enough for most people to figure out how platform works and if forex and CFDs trading is something they want to pursue.
Trading platform is the software developed solely for the purpose of trading. It includes chart analysis, ways to place orders and overview of the account and the portfolio. Platforms come in various layouts and forms. The most popular forex trading platforms are MetaTrader 4 and MetaTrader 5. Metatrader is a standalone piece of software that needs to be downloaded and installed. If you have Mac or PC, there exist a version of the MetaTrader, just make sure the broker you are planning to use offers the version you want. Other platforms are Sirix, JForex and some brokers also have proprietary trading software. Plus500 offers their own system.
Some brokers will charge fees with every trade you make. They are usually defined as % of the trade. Others will waive the fees, however, they will incur a cost on the trader through spreads. Spread is the difference between bid and ask price – the price you pay for an asset and the price you can sell the contract for. This difference helps cover broker’s operating costs. If you are trying to avoid paying too much to the broker – look at spreads. Brokers with lower spreads will then cost less. You can also trade zero spread account – in this case a commission per trade is paid. These kind of accounts are usually interesting to big raders who want to remove cost as share of their trade since they have large volumes.
Some of them will offer higher, albeit fixed spreads that you always pay, while others have variable fees that change with the market and can go either way. Your selection will depend on your own preference, but rule of thumb is to try to find broker with as lowest spreads as possible.
Leverage is an amazing tool that enables forex traders or CFD traders to use more money per trade than they would otherwise. Thereby the only limit is the margin, the remaining money on their account that guarantees in case of loss. Leverage will enable more profit in case of correct price prediction, so this is why it is extremely interesting to more advanced traders who also have experience in risk management. If you are really sure about some trade, maybe you want to put as much money as possible to gain from the prediction. However, be warned that leverage is a double-edged sword and that beginners should not consider leverage as determining factor when deciding which broker to choose.
Can I trade Forex and CFDs from my New Zealand?
Since online trading literally transcends borders, traders from the most of the world’s countries probably will have opportunity to try trading these instruments – so New Zealanders will have no issue depositing with any broker. In Australia (ASIC), New Zealand (FSB), EU (Cyprus-CYSEC and FCA UK) the authorities have already recognized this type of trading. Other important markets are South Africa, China, Japan. When choosing a broker, got to the live chat of the broker and ask the support agent if the broker accepts traders from New Zealand, even though most of them do.
Why should I use a licensed broker?
Licensed or regulated CFDs brokers are those companies who took time to comply with the governments standard of customer protection in order to make sure they are not scamming their clients and stealing their money. Many people are not always sure what forex and CFD trading means. Many unregulated brokers out there deceive customers that it is easy to earn money trading citing fake claims of huge profits for their clients. Regulated forex broker always needs to state the risks correctly, needs to keep customer’s money safe, needs to have a reserve in order to be able to pay out their customers when the business is not doing well. This way traders need to worry about trading and proper analysis and education, knowing their money is not in the hands of crooks that have fake headquarters and employ remote sales teams that use unfair practices to lure customers.
Founded in 2005, FP Markets is a leading global forex and CFD broker owned by the Australian based investment company, First Prudential Markets Pty Ltd. FPmarkets covers more than 10,000 trading assets across all international markets, for retail investors and trading professionals in English, Chinese and Spanish languages. We were impressed by the extensive range of free trading tools and educational material provided by FP Markets, aimed to help create trading opportunities for its clients in a ‘true ECN’ environment. Notably, FPmarkets is focused on a high level of service, receiving 35 industry awards to date on almost every operational aspect of the business. Investors can set up an MT4 platform, forex account for as little as AUD $200 and trade major currency pairs, Bitcoin, metals, commodities, and indices with up to 500:1 leverage and tight interbank spreads. With 12 years of experience in the industry, FPmarkets is regarded as the most established Direct Market Access, CFD broker in Australia. Indeed, it offers CFD traders, a huge list of tradeable assets including equities, indices, futures contracts, ETFs, currencies and commodities.
Furthermore, FP Markets is reputed to have the best web based IRESS platform on the market for desktop and mobile trading in CFDs. With the IRESS suite of trading solutions, CFD traders get Direct Market Access pricing and the possibility of multi-product execution on 8 global exchanges. We saw that FP Markets likes to reward both new and established customers with promotional offers from time to time, with the promotions posted on the FAQs page of the broker’s website.
FPmarkets is regulated by the Australian Securities and Investment Commission (ASIC) and has offices in Sidney, Shanghai and Beijing. The company operates with the Australian Financial Services Licence number 286354.
Retail traders at FPmarkets can choose from two Forex account types and three CFD account types. Significantly, clients can open multiple customised accounts reflecting their trading requirements.
FPmarkets gives traders the opportunity to practice forex trading on the MT4 platform by opening a Demo account. Traders are given $100,000 of virtual money for risk free practice before deciding whether to deposit real money. Traders wishing to open a demo account need only give a name, email address, country and phone number. Subsequently, download the secure, MT4 trading software to their desktop and get started. The entire process takes just 30 seconds and traders who decide not to continue, can uninstall the MT4 software easily.
By setting up a forex account, traders can focus their attention on the forex market which revolves around major currency pairs and operates 24/6. FPmarkets has two types of STP forex account, both operating on the MetaTrader4 trading platform where trades are executed at ‘lighting’ speed. The minimum trade size for both accounts is 0.01 lot. Islamic accounts are also available on request, for traders choosing one of the MT4 forex trading account types.
Traders choosing to register an FPmarkets forex account can now trade Bitcoin on the MT4 platform. Significantly, traders can access flexible leverage up to 10:1 which is a high compared to many online forex brokers.
A minimum deposit of AUD $200 or currency equivalent is required to set up an MT4 Standard account with flexible leverage up to 500:1. Traders get access to 50+ forex pairs, metals, commodities and indices. Whilst the account is free of commission, spreads start from 1.0 pips on major currency pairs, which is relatively high.
The minimum opening balance required for an ECN Raw account is AUD $1,000 or currency equivalent. Traders get access to more than 60 products including 50+ currency pairings as well as indices, commodities and metals. Leverage up to 500:1 is available and commission of AUD $3.5 is payable per 100,000 lot traded. Importantly, the pip spread is tighter than the Standard account, starting at 0.0 pips on major currency pairs.
Traders who follow the Moslem faith can request a swap-free Islamic account after setting up a regular MetaTrader platform account. Upon approval, the regular account is converted to an Islamic account. Nevertheless, it retains the trading terms and conditions of a regular MetaTrader platform account. The fundamental difference is that swap charges and swap credits are not debited or credited on positions held open overnight. Notably an administration fee is charged on positions held open over two consecutive trading days.
CFD traders have more than 10,000 underlying assets in equities, indices, forex pairs and commodities to choose from at FPmarkets. Any of the three CFD customised account types gives access to the award winning IRESS web-based trading platform and major international markets. Importantly, price and data transparency are key on the IRESS platform, giving traders Direct Market Access pricing. CFD account holders can place telephone trades free of charge irrespective of account type.
A minimum deposit of $1,000 is required to open a ‘Professional’ account at FPmarkets for CFD trading. Notably, Direct Access Market commissions and margin rates charged to professional account holders are very competitive. We saw that a minimum $10 brokerage fee is payable, then a 0.1% brokerage rate. Significantly, ASX delayed data is provided free but fees for live data are payable if insufficient commission is generated every month. Traders can access competitive financing by paying RBA +3.5%.
A minimum opening balance of $25,000 is needed to set up a ‘Platinum’ account for CFD trading at FPmarkets. Importantly, the commission and financing rates on CFD trades are lower than the professional account. We saw financing rates are at RBA+3% and the brokerage rate at $9 minimum, then 0.09%. Nevertheless, whilst ASX delayed data is free of charge, a fee is charged for live data, if less than $50 commission is generated monthly as with the Professional account.
To open a ‘Premier’ account to trade CFDs at FPmarkets, a minimum opening balance of $50,000 is required. However, traders are not charged platform fees or minimum brokerage charges. Indeed, we saw that the brokerage rate is a flat 0.08% and that competitive financing is available at RBA+2.5%.
FPmarkets does not have proprietary trading software but offers forex traders access to the popular and reliable, MT4 and MT5 trading platforms through software downloads to desktop terminals and native apps for mobile devices. For traders interested in trading CFDs, the web based IRESS platform with HTML5 technology is available for desktop and mobile trading.
The MT4 is the world’s favourite forex trading platform, created to run on desktops using Windows operating systems (Windows 2000 onwards) and with Mac OS X. The software must be downloaded to the desktop where it is fully customisable to reflect personal preferences in background, font and chart colours. Significantly, MT4 provides live streamed prices on both the live and Demo platform creating a ‘true ECN’ trading environment. Moreover, it’s packed with features making it stand out from most other forex trading platforms. These include numerous order types, 3 chart types and 9 time-frames, one click trading, multilingual options as well as Expert Advisors and indicator tools. Whilst the more advanced MT5 trading platform is offered for forex trading with FPmarkets, the MT4 remains the software of choice with most retail traders.
One-click mobile trading on a user-friendly interface is available through the FPmarkets MT4 iPhone and iPad app (free download at the Apple App Store) as well as an FPmarkets MT4 Android app (free download from the Google Play Store). Importantly, the mobile apps facilitate trading on the move with live quotes as well as giving access to complete trade orders including pending orders and trade history. Interestingly, charts and symbol prices can be viewed in offline mode.
An outstanding platform for trading CFDs, the highly intuitive IRESS trader operates with web based HTML5 code and is instantly accessible from any Windows and MAC operated desktops without software download. The FPmarkets web IRESS has a fully customisable interface and includes an extensive charting package, 59 technical indicators, 50 drawing tools and prices for 10,000 trading instruments. It even lets traders compare divergences between instrument prices on multiple time frames.
The customer service provided by FPmarkets is straightforward and efficient, helping to earn the company, industry awards for customer satisfaction. Customers can get instant help over the live chat function on the website 24 hours a day, even without giving a name and email address if they prefer to remain anonymous. An email address can be used for written enquiries and for traders who prefer to speak with a customer support agent over the phone, Australian and international phone numbers are given on the website. We also saw that Australian and international Fax numbers are available for clients wishing to send documentation for account verification without using the internet.
FPmarkets supports account funding in multiple currencies including AUD, USD, CAD, EUR, GBP, SGD, HKD, JPY, NZD, CHF and CNY. Customers can choose from a broad range of secure payment methods to fund their FPmarkets trading accounts. Currently, we saw that clients can deposit with Visa, Master and UnionPay credit cards, AstroPay, wire transfer, BPay, cheques and with various electronic payment methods including Neteller and Skrill. Transfers from other brokers are also accepted and clear instructions are given by FPmarkets on how to carry them out. Notably, we saw that FPmarkets is planning to add ‘alternative funding gateways’ soon.
It’s important to realise that customers are charged fees for depositing funds, with the fees dependent on whether they are resident in Australia or overseas. Traders funding their accounts with a credit card are charged 1.8% if they live in Australia and 3.18% of the amount deposited if they live elsewhere. Customers depositing USD using AstroPay are charged a 5% fee. Funding using Neteller is charged 4% and USD deposits made with Skrill are charged 4%. Customers within Australia using BPay to deposit AUD are not charged a deposit fee. We did not see the exact fee for bank wire transfers, however, deposits made with Wire2Pay are charged a hefty 5.95%.
We were pleased to see that withdrawals to customers within Australia are free of processing charges, whilst withdrawals requested by overseas customers are charged a flat $20 transaction fee for international bank transfers and 1.8% of the amount withdrawn to a credit card. We saw that the withdrawal fees are paid to the banks and credit card companies making the transactions and not retained by FPmarkets.