CFD Trading Platforms: What You Must Look For In A Plaform Provided By A CFD Broker

Some CFD providers or broker may use basically the same CFD platform as another provider, as they are relabelled “white label” platforms. So if you know one, you will know the other. Other CFD trading platforms may look and work completely differently.

Either way, this is what to look for in a CFD trading platform that's provied by a good CFD broker:

1. Whether you can place limit or stop orders to enter a CFD position in the evenings.

For many CFD systems, you may want to place an order in the evenings, to enter a CFD position when the market opens the next morning. This is handy for people who work in the day, because they can do all their trading in the evening when the market is closed. And these orders to enter a CFD are usually done with limit orders. Some providers allow stop entry orders also.

And for these limit orders, you should check that they be placed on either side of the market. For example, some traders may want to place a limit order to buy, at a limit price of say $5.50, which is above the latest closing price of say $5.30. So if the market opens or trades tomorrow at $5.50 or below, they'll get into the position. It's a way of placing an order to help make sure you enter the position, unless of course the price gaps up the next morning above $5.50.

So check that you can place them in the evenings (usually can place them at any time of the day or night), and that you can place them at a limit price that is above the last trade price, if that's how you trade the system.

2. Whether "market orders" are available out of market hours as well as during market hours.

Some providers will let you place an order when the market is closed, to get into a position at the opening price or the first traded price after the open. This may be done with a "market order" placed when the market is closed, or on some CFD platforms, it's called an order to "enter at open".

It's useful to note here that with some providers, you can only enter a CFD when the market is open. So you'll need to be at the computer during market hours.

If the market is in your home country, then this is the morning. If you’re trading an overseas market, then this could be in the afternoon or even at night.

3. Whether you can place stop orders to enter a position.

For some systems, stop loss orders to enter a trade are used.

These are known as "stop entry" orders. That is, if you place a stop buy order at a price of $5.50, then you'd enter the position if the stock trades at or above $5.50. Some CFD trading platforms will allow you to place these orders ay anytime, which is helpful for those people who trade in the evenings because they work in the day. For others, do they allow you to enter only during market hours?

4. How your stop loss orders are placed.

As mentioned, one of the advantages of CFDs over stocks is that you can place automatic stop loss orders for CFDs. Just check the details of order placement for stop losses for the CFD provider you want to trade with. What you’re looking for will depend on what your trading system. For example:

a) Can you place an "if done" stop loss order, linked to a pending order to enter a CFD?

If you can, then you can place your order to enter the CFD, and its stop loss at the same time each day. Especially for people who are working during the day, this is handy as they can do all their trading in the evenings. With these “if done” stop loss orders just mentioned, they are usually of two types.

One, is that if you’re using a limit order to enter a CFD, then you can specify the stop loss at a specific price.

Two, is that if you’re using a “enter on open” kind of order, then you will be able to specify your stop loss at a particular distance from the entry price, what ever the entry price may be. Exactly what you can do will depend on the provider, so check out their website, and if it’s not clear, email or call to ask them.

b) And when placing these stop loss orders, are there any limitations on how far the stop losses can be from the entry price? Some providers have no limitations, while some do have limitations, in that you have to have a minimum distance away.

c) Note that if you're using a provider to place a market order only during market hours, then you’d usually need to place a stop loss just after you have entered the trade. So the above points won’t apply to you, except for checking how far from the current price spread you can place your stop loss order, similar to point b) we just mentioned.

5. How easy their charts are to use.

Some traders use the charts on the CFD brokers platforms to fine tune their entry, especially if they’re day trading CFDs

Many people though, trade with a system that does not require them to be there at all when the market is open. In this case, the charts are relatively less used. But you do want to have some decent charts so you can tell what is going on if you need to.

6. Their account management log book.

Have a look at the account management log book of the platform, which is where you keep track of your account, your profits and losses from trades, as well as the costs of trading such as commissions and interest charges or payments. This should be quite clear and understandable. You do after all, want to keep track of your trading results.

Note that these are not the only factors to take into consideration when choosing a CFD broker or dealer.

As well as these factors about their platform itself, there are other factors to consider when choosing a CFD provider.

And the best way to practice placing orders?

It's to have a go at the various provider's CFD demo accounts and platforms