Is spread trading better than the usual contract for difference (CFD) trading?？How to choose the best broker if you want to try spread trading？What is the most important？

Spread trading is one of the most common ways to profit in the market.。While spread trading is promising, it is not without risk。Finding the right broker is crucial if you want to try spread trading。The best spread broker should be trustworthy and able to place bets using a variety of assets。Before delving into it, let's take a look at spread trading。

What is spread trading?？

In short, spread trading is when investors make bets or speculate on price movements in financial instruments and open positions based on where they believe the price movements are.。For example, if they believe that the price will rise, they will open a buy position; conversely, if they believe that the value will fall, they will open a sell position。Investors can speculate on the price movements of different types of assets, such as foreign exchange, stocks, and even commodities, and they can choose how much risk they are willing to take。

Some spread trading is advertised as a tax-free, commission-free activity, making it popular with investors。It is also a leveraged product and is very useful for investors with the lowest budgets。However, when investors suffer losses, it also increases losses。Another disadvantage of spread trading is that during periods of volatility, brokers may widen spreads, triggering stop-loss orders and increasing trading fees。

Spread trading and CFD trading.

You may think that spread trading sounds very similar to CFD trading, both of which are leveraged derivatives and require pre-deposited margin.。In both cases, the investor cannot take ownership of the asset。However, CFDs are derivative contracts between investors and financial institutions that track the value of certain instruments.。

For example, you want to trade the US 500 Index and the CFD provider says 1 CFD is worth $1 per point。Meanwhile, the sell and buy price of the US 500 index is 4520.0-4520.5。You think the price is going up, so you take 4520.Buy 2 CFDs at the price of 5.。So you get:

4520.5 x $2 = $9,041

Assuming you guessed correctly, when the US 500 index is quoted at 4550.0-4550.You close your position at 5: 00.。How much profit can you make？

4550.0-4520.5 = 29.5 points

29.5 x 2 CFDs = $59 (profit)

But if you guessed wrong, the US 500 is now quoted at 4480.2-4480.9, you can calculate your loss like this:

4480.2-4520.5 = -40.3 points

-40.3 x 2 CFDs = 80.$6 (loss)

Now, how about spread betting？As mentioned above, spread trading allows investors to speculate on price movements of financial instruments。For example, suppose you want to speculate on the US 500 index。Suppose you predict that the market will rise from 4540 points and bet $5 per point。

As a result the market goes up and your trade goes up, so the decision is made to close the position。But then came a new price, selling for 4556.2, the purchase price is 4557.1。So the result of the calculation is:

4556.2 - 4540 = 16.2

Because you bet $5 per point, which means:

16.2 x $5 = $81 (profit)

But what if the market goes down？Suppose the price is now 10 points below your target entry price, the new sell price is 4530, and the buy price is 4530.8。Your losses will be:

4530 - 4540 = -10

- 10 x $5 = $50 (loss)

That means you lost $50 on this bet。

What aspects of poor trading brokers should be focused on

When it comes to spread betting brokers, you need to find the best broker to keep your wages safe。There are many brokers that allow spread trading, but you need to know which factors you favor yourself。Here are some of the most important aspects you need to consider。

1.Trust

It's important to trust your spread broker。Don't forget to do your homework and research on brokers to find out how long they have been in business or how much experience they have in the market of your choice。Do not forget to read the reviews of other traders on the forum。

Please check carefully the regulator of the broker。A good broker should be aware of its legitimacy; also check their location to determine which regulatory agency they are regulated by。For example, if your broker is based in the EU, they should be regulated by the FCA or other regulators in the EU。

2.费用

Ultimately, the purpose of betting is to make a profit from the market, and you must not want to lose most of your profits to pay broker fees, which is why it is always a good idea to find a low-cost broker。First, you need to consider the spread, which is the difference between the asset's bid and ask prices。Usually, brokers charge fees for opening and closing positions, so try to find the broker with the lowest spread in order to maximize your profits。

3.Customer Service

A good spread trading broker should provide you with the best customer service in order to better interact with them。Some things you need to consider about customer service are what type of language they offer, when and where to contact their service personnel (email or via live chat), some brokers offer 24-hour customer service to respond to overseas customers。

4.Platform

Trading Platform May Affect Your Forex Spread Trading Activity and Accessibility。For example, if you are very busy and rarely stay in one place for a long time, then you need a platform suitable for mobile devices。The question is, does your broker platform allow you to do this？Can the mobile phone version contact customer service？

Best Spread Trading Forex Broker

Here are some of the best spread trading forex brokers you can consider。

Pepperstone

Pepperstone is relatively new to the spread trading market, but in a short time has become one of the most trusted brokers。The Forex broker was launched in 2010 and is regulated by the FCA and ASIC.。When it comes to spread transaction costs, Pepperstone offers tax-free profits on Forex, Commodities and Indices and uses MT4, MT5 and cTrader as its trading platform, Pepperstone also has award-winning customer support to provide excellent trading assistance。

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Founded in 2010 by a team of experienced traders working together to improve online trading, Pepperstone is based in Melbourne, Australia and has grown into one of the world's largest forex brokers.。If a trader wants to find a broker that offers low spreads, fast execution and award-winning support, the answer is Pepperstone。

Pepperstone has strong legal safeguards as it is licensed by Australian regulators ASIC and FCA.。Traders "funds can be deposited into separate accounts at Australia's top banks, one of which is National Australia Bank (NAB).。Therefore, if a trader chooses to open an account in Pepperstone, the safety of funds is not an issue。

They successfully partnered with 23 top banks to bring bids to investors instantly via fiber optics, which enabled all orders to be executed 100% automatically with delays as low as zero..05 milliseconds, no need for trading desk intervention and re-quotation, and ultra-low transaction costs。

Pepperstone is trusted by more than 73,000 traders worldwide, processing an average of 125 per day..$500 million in trading volume and won awards for such things as:

Best Forex ECN Broker and Best Forex Trading Support Worldwide 2019 (Europe)
Best Australian Broker and Best Trading Platform 2018 by Compare Forex Brokers
2018 UK Forex Awards Best Forex ECN Broker, Best Forex Trading Support and Best Forex Trading Conditions

With numerous awards, Pepperstone attracts more and more traders from all over the world。Pepperstone's performance rose not only because of its ultra-low spreads and fast execution services, but also because many traders were keen to trade in currencies other than the US dollar.。

As a result, Pepperstone is one of the most responsive brokers to the market because it is willing to accept deposits in 10 currencies, including the Australian dollar, the US dollar, the euro, the Canadian dollar, the British pound, the Swiss franc, the Japanese yen, the New Zealand dollar, the Singapore dollar and the Hong Kong dollar.。

Pepperstone allows traders to choose between 11 trading platforms: MT4 Desktop, MT4 Mac, MT4 iPhone, MT4 Android, MT4 iPad / Tablet, MT5, WebTrader, cTrader WebTrader, cTrader cAlgo and cTrader Mobile。The choice of trading platform is very practical for novices because it executes quickly。

When trading Forex, traders can enjoy 0 on their Razor account.0 pip original spread, over 61 currency pairs, and commission-free account funds for various deposit options。In addition to currency pairs, Pepperstone offers several types of trading tools, including indices and stocks, commodities and cryptocurrency CFD。

Commodity trading tools are very diverse, not only metals, gold and silver, but also soft commodities such as cotton, sugar, coffee, cocoa and orange juice.。Pepperstone also offers energy (oil and gas) trading.。

Pepperstone offers two types of accounts, Razor accounts and Standard accounts。If you are a beginner, it is recommended to choose a EUR / USD average spread of 1.0-1.3 point and commission-free standard account。

Traders with specific trading styles (such as scalping traders and algorithmic traders) may enjoy the traditionally lower-cost setup of Razor accounts, with a trading commission of 7 Australian dollars and a trade of 100,000 US dollars per round..01 (micro) and 1: 400 leverage to start trading。

As Pepperstone customers, traders can deposit and withdraw money through Visa, Mastercard, POLi Internet Banking, Bank Transfer, BPay, PayPal, Neteller, Skrill and Union Pay。

If you are new to trading or want to practice your trading skills in a risk-free environment, you can create a demo account, but if you are experienced or prefer to learn by doing, Pepperstone offers live accounts that allow you to trade with real-time execution and pricing.。

Traders can also use third-party services to follow popular trader scenarios while learning how to improve their trading abilities。Pepperstone works with a range of social trading platforms for traders to choose from, such as Myfxbook, ZuluTrade, Mirror Trader, MetaTrader Signals and Duplitrade。

Capital.com

Another excellent spread broker is Capital.Com。The brokerage firm not only offers small spreads, but also spread trading products without taxes and commissions。You don't need to worry about security because the broker is regulated by ASIC and FCA。The company serves a wide range of traders and offers mobile apps and web platforms, as well as popular platforms such as MT4.。You can contact their customer service team by phone and email。

Moneta Markets

Moneta Markets has different trading platform options to meet the needs of various types of investors; customers can choose MetaTrader 4 or 5, as well as WebTrader and AppTrader。Unfortunately, trading tools are not integrated into mobile and desktop applications。Moneta Markets customers can experience some of the lowest costs in the industry and have plenty of tools to choose from。

The broker also offers demo accounts for new traders and professionals, regulated by the Vanuatu Financial Services Commission, with access to customer support via phone and email, very useful for mobile traders。

City Index

As a well-known broker in the industry, City Index deserves to be one of the best spread trading brokers you should consider。The company has been around for over 35 years and has won several awards for its outstanding trading platform and mobile app.。City Index is also regulated by ASIC and FCA, so its credibility is not an issue.。The broker offers tax-free spread trading with over 8,000 markets to choose from worldwide。Unfortunately, City Index customer service is not available by phone and can only be reached via email and chat support.。

CMC Markets

CMC Markets is regulated by BaFin and FCA and is one of the best spread trading brokers。They have the best mobile, tablet and online trading platforms for all kinds of clients。CMC Markets promises no hidden fees for its spread trading and offers more than 11,000 instruments to place bets on。The disadvantage of CMC Markets is that its customer service can only be obtained through email support, which may break the deal for some people。

FXCM

FXCM is a very trusted broker with over 20 years of experience and is one of the best spread trading brokers。This broker is a good choice if you want to start spread trading, as they allow you to open a demo account to familiarize yourself with betting before actually entering the market。FXCM also allows you to make smaller bets, ideal for novices。Not to mention the tax-free concessions they offer。

FXCM is regulated by ASIC and FCA, so the security of this broker is very high。FXCM offers different platform options such as MetaTrader 4, Trading Station II, MirrorTrader and NinjaTrader。If you need more information, you can always contact customer service via email and chat。

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FXCM (Forex Capital Markets) is the brand name of a retail broker used to trade financial markets, especially the Forex market。The broker was founded in 1999 and was originally based in the United States.。After a series of lawsuits from clients and the settlement of cases by the US regulator (CFTC), FXCM moved from the US to the UK and became a broker authorized and regulated by the Financial Conduct Authority (registration number 217689).。

与FXCM trading is supported by enhanced execution through liquidity provider flow quotes from the FastMatch electronic communications network。

FXCM works with several global banks including Barclays Bank, Citadel Securities, Citibank, Deutsche Bank, FASTMATCH, XTX Markets Limited, UBS, Morgan Stanley, Commerzbank and Jefferies Financial Services, financial institutions and other market makers as their liquidity providers.。

This in turn makesFXCM is able to provide its customers with fast trade execution, competitive spreads, low negative slippage, no re-quotes, no stop / limit limits, and up to 89% of orders executed at the required price or better。

For trading platforms,FXCM is famous for its proprietary product Trading Station。The latest version of the web display for this platform claims to be built with Mac Friendly HTML5。It offers a range of trading devices such as integrated news, economic calendars, FXCM's top trading tools, social trading capabilities through FXCM Cloud, customized trading analysis, automated strategies and advanced charts for better analysis.。To support flexible traders,FXCM also offers a mobile version of Trading Station for iOS and Android users。

However, the company's internal platform is not the only option for customers。For more familiarCustomers of MetaQuote products, FXCM also offers the option of using MetaTrader 4。In addition, ZuluTrade is also available for clients interested in cross-broker replication trading schemes。

FXCM has chosen to offer trading accounts based on trading instruments rather than on minimum deposit classification account types。For FX traders, this broker offers Active Trader and Institutional accounts。

Active Trader is the ultimate account type for retail traders with two levels of pricing。Level 1 requires a minimum deposit of $25,000 and a commission of $30 for 1 million volumes, while Level 2 does not have details of deposit requirements but offers better fee conditions。The difference between the two grades is from 0.Start at 2: 00。

Institutional accounts, also known asFXCM Pro, marketed as a wholesale execution and liquidity solution for retail brokers, hedge funds and emerging market banks。The account offers from 0.1 point trading spread and other competitive benefits such as API solutions as well as prime brokerage services。

For nonFX Trader, FXCM offers a CFD trading account with low spreads from 0.37 points (in XAU / USD) and there are a range of asset classes, from precious metals, soft commodities and indices。

Last but not least, a series of in-depth articles are provided to help traders with their knowledge and insights into the Forex market。如Trading tools such as FXCM Plus, Market Scanner, Trading Signals and Technical Levels have also been developed to support traders opening accounts with FXCM。

In general,FXCM is an experienced retail broker with lots of "ammunition" to help traders with the best execution, pricing and tools。It is a well-regulated broker backed by a long history of financial markets, although the brokerage industry in the United States has a dark history.。

Nevertheless, the relatively high minimum deposit standard ($25,000) makes FXCM a broker for experienced, well-managed traders and is not recommended for new traders with limited funds.。

IG

IG has extensive experience as a broker as it has been in the industry since 1974 and is regulated by the CFTC / NFA and the FCA.。It's safe to say that they are one of the most reliable and best spread brokers you can find。You don't have to pay capital gains tax or stamp duty to place bets and get full market exposure with a small initial deposit。IG offers a large number of trading platforms such as MetaTrader 4, PureDeal and L2 Dealer。If you have any questions, you can contact their customer support via email。

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IG Markets is an online trading provider with decades of experience in the financial markets。Founded in 1974, the world's leading company has more than 178,000 customers worldwide as of 2019, covering more than 16,000 markets, and is licensed and regulated by the Australian Securities and Investments Commission (ASIC).。It should also be noted that IG Markets is one of the most cutting-edge online CFD brokers, and their services have expanded to 15 countries on five continents.。

As well as being known for its solid experience, IG Markets is also known for its truly broad range of trading tools。The broker has long been considered one of the most accomplished companies in offering clients the most traded assets, with instruments including forex pairs, 26 indices, more than 12,000 stocks, hard and soft commodities, cryptocurrencies and other markets such as bonds, interest rates and options.。

Forex trading in IG Markets is offered in two ways: CFD and DMA。The following are the conditions for each transaction type:

Forex CFD

• Minimum spread: 0.6 o'clock
  Margin: None
  Platforms: Web, Mobile Apps, MT4, ProRealTime, L2 Dealer, Terminal, and API
  Transaction Size: Contracts
  Virtual Account: Yes

Forex DMA

• Minimum spread: No details
  Commission: From $10 per $1 million traded
  Platforms: Web, Mobile Apps, L2 Dealer, Terminal, and API
  Transaction size: lots
  Demo Account: None

All customers can use these two trading methods, however, DMA does not support trading in MetaTrader 4, nor do customers allow virtual trading in demo accounts。It is essentially a type of trading reserved for experienced traders, and the best pricing in the market is very much needed, so DMA provides market depth from a range of exchanges (including the full market depth of the London Stock Exchange)。

The trading platforms in IG Markets are accessible via the web, mobile apps, and desktop, and they offer 2 platform types: Core Platform and Professional Platform。Core platform for all types of transactions with DMA, ProRealTime access and Forex Direct add-ons, while professional platforms include L2 Dealer, ProRealTime and MetaTrader 4。

The fees charged by the first two platforms include a minimum balance of $2000 and a monthly fee for stock data and Tier 2 price (for L2 Dealer), and a monthly platform fee of $40 and a monthly fee for stock data (for ProRealTime)。

There is no minimum balance requirement for IG Markets to open an account, it also offers no overnight interest accounts and customers do not have to pay any interest, rollover or overnight interest charges on overnight positions.。However, all costs and expenses are included in the spread。The account is ideal for long-term traders who need to keep a position for days or even weeks。

For beginners, IG Markets has established the IG Academy, offering interactive education and online trading courses。In this way, customers can master the financial markets through infographics, video presentations and trading highlights provided in after-school quizzes。Even better, IG Academy has been integrated into its mobile application, so customers can always understand the financial markets in a more effective way。

In summary, IG Markets is a client-friendly broker with over 40 years of experience to support its reputation, and their efforts and commitment are proven in a unique core and professional platform.。

Less experienced traders can apply for a Forex CFD account in Core Platforms or MetaTrader 4, while professionals can get the best experience in the financial markets through IG Market's DMA trading and L2 Dealer or ProRealTime platforms。

ETX

In addition to being the best spread trading broker, ETX is considered one of the best brokers for Forex trading and CFDs。Profits you earn through the broker's spread trading are exempt from stamp duty and capital gains tax in the UK.。ETX has been in existence since 1965 and is regulated by CySEC and FCA.。In terms of trading platforms, ETX offers ETX TraderPro to help customers with trading and betting activities。If you encounter any problems, you can always contact them via email。

Vantage FX

Vantage FX is an excellent broker for trading Forex and CFDs for clients worldwide and one of the best spread trading brokers。You only pay the spread of that broker, no commission。To ensure your safety, Vantage FX is regulated by ASIC and FCA。The broker uses MetaTrader 4 and 5 and WebTrader as trading platform。If you encounter any problems, you can contact customer service via email, phone and live chat。

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Founded in Australia in 2009, Vantage Markets is a brand of Vantage International Group regulated by the Cayman Islands Monetary Authority (CIMA).。Before being called Vantage Markets, it was called MXT Global in 2009 and Vantage Markets Pty LTD in 2015.。The Vantage Group also operates other companies such as Vantage Global Prime (ASIC), which is regulated by the Australian Securities and Investments Commission, and the Financial Conduct Authority (FCA).。

Vantage Markets offers further protection to clients by segregating their funds and depositing them in National Australia Bank (NAB), the broker said.。NAB is one of Australia's four largest financial institutions and one of the 20 safest banks in the world.。So customers don't have to worry about putting money in Vantage Markets。

With Vantage Markets, traders will experience ultra-fast trade execution, as well as interbank ratings and raw ECN spreads.。These elements can provide clients with a true institutional trading experience, covering a variety of trading tools, and also providing services designed for beginners and professionals to trade Forex ECN and CFD trading of indices, commodities and US and Hong Kong stocks。These tools are available on MetaTrader 4, MetaTrader 5, MetaTrader WebTrader, TradingView's CHARTS, mobile apps (for Mac, PC, iOS or Android), and social trading platforms such as FXbook and Zulutrade。

By registering at Vantage Markets, traders will have access to a range of educational materials and research tools, including the MT4 SmartTrader tool, a variety of promotional trading offers and rewards programs, and accounts with leverage up to 500: 1.。However, ASIC and FCA customers have a leverage of 30: 1 and generally do not offer concessions to Australian and UK customers due to compliance policies.。

Vantage Markets offers research from internal staff and guest writers in the form of technical and fundamental analysis on its blog, as well as an economic calendar powered by MQL5 from MetaQuotes。For customers with deposits of at least $1,000, Vantage Markets offers a set of MT4 plugins developed by FX Blue LLP called MT4 SmartTrader Tools。

As an authorized representative of Vantage Global Prime, the broker serves retail traders under the Vantage Markets brand and provides the following tools:

• 44 currency pairs, the most liquid currency in the global foreign exchange market
  The 16 most liquid indices in the world, including the S & P 500, DAX, FTSE, DJ30 and more
  16 Commodities, whether Soft Commodities or Precious Metals
  DJ30ft, DAX4ft, NAS100ft and other 5 index futures
  600 + US, UK, Hong Kong stocks from large companies such as Apple, Google, Coca-Cola and large companies listed on the Hong Kong Stock Exchange

Customers can open an account with Vantage Markets and deposit funds in 8 base currencies: US Dollar, British Pound, Canadian Dollar, Australian Dollar, Euro, Singapore Dollar, New Zealand Dollar, Hong Kong Dollar and Japanese Yen。It also provides customers with convenient deposit and withdrawal methods through local and international bank transfers, credit / debit cards and electronic payments.。

Overall, Vantage Markets is suitable for retail traders who have small deposits and prefer maximum leverage thresholds。In terms of pricing, Vantage's commission-based initial ECN account is a clear choice for cost-sensitive traders because of its low total cost compared to standard account products。

ThinkMarkets

The broker has been in existence since 2010 and is regulated by ASIC.。ThinkMarkets is an Australia-based multi-asset brokerage firm that is also considered one of the best spread trading brokers.。However, their spread betting scheme is only available in the UK。There are many options for trading platforms such as MetaTrader 4, MetaTrader 5 and ThinkTrader。If you encounter any problems, you can contact their customer service via email and chat support。

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As a multi-asset online broker, ThinkMarkets offers a wide range of trading assets from Forex to Precious Metals, Commodities, Indices, Stocks and Cryptocurrencies。The Australian-based broker was founded in 2010 and has since opened more headquarters in London and regional offices in Asia Pacific, the Middle East, North Africa, Europe and South America.。

As their operations have grown, ThinkMarkets have received multiple awards and recognitions in all aspects, most recently, they won the Best Value Broker Award in Asia at the 2020 Global Forex Awards.。

Standard account average forex spread for traders who open an account with ThinkMarkets from 1.From 2, while ThinkZero offers 0.Best trading experience at 1 point spread。However, traders may want to take into account that ThinkZero charges 3 per side for every 1,000,000 trades..$5 commission。

As a global online broker, ThinkMarkets operates under the supervision of multiple financial regulators。For example, ThinkMarkets Australia is managed by TF Global Markets (Aust) Limited and licensed by the Australian Financial Services Authority and the Australian Securities and Investments Commission (ASIC), ABN: 69158361561。ThinkMarkets UK is registered with the Financial Conduct Authority (FCA) under the name TF Global Markets (UK) Limited (No.09042646)。

ThinkMarkets is always committed to improving its trading environment through a variety of advanced products.。Auto trading enthusiasts can use free VPS hosting, while enthusiastic traders who want to experience outside the MetaQuote platform can try ThinkMarkets' proprietary platform ThinkTrader。

The trading platform offers 3 different interfaces designed for web desktop, tablet and mobile display。In addition, there are more than 80 mapping tools and more than 125 technical analysis indicators and other customized tools can be accessed through the mobile screen, will undoubtedly provide a new mobile trading experience。

In terms of market updates, trading in ThinkMarkets will be accompanied by news from FX Wire Pro, which is known for its strict policy of adhering to objective news reporting and providing critical, credible information in real time.。Information areas covered by FX Wire Pro include economic commentary, technical-level reports, currencies and commodities, central bank bulletins, energy and metals, and event-driven bulletins。

For payment methods, ThinkMarkets provides gateways through bank transfers, credit cards (Visa and MasterCard), Skrill, Neteller, POLi online banking, BPay, and Bitcoin wallets。

All in all, for a company that has been in business since 2010, ThinkMarkets has been quite successful in terms of legal status and trading technology innovation.。As an additional guarantee of security for traders, the broker has committed to a $1 million insurance protection plan, which is implemented through ThinkMarkets and Lloyd's of London insurance policies, providing up to $1 million in protection for clients' funds.。

Conclusion

Despite the risks, spread trading remains popular in the market。There are two ways to bet, forex spread betting speculates on whether the price of a currency will rise or fall, while financial spread betting speculates on price movements in other financial products。To do this, you need the best spread trading broker, depending on its security, cost, platform and customer service。