Hi trade2win,What is a 'good' CFD provider? It is such an...

Hi trade2win,

What is a 'good' CFD provider?

It is such an individual choice and really depends on your style of trading, the products you trade, the markets, if you need a charting package with it, how important is customer service to you, safety of your funds etc.

I have worked with a few brokers in the last year and I was shocked to see what is going on with our money and our private information.

Since I don't know anything about your requirements here are some general points that I considered when chose my broker:

1. Who runs the company?
As far as I know there are only 4 online broking ocmpanies that are run by Australians. What I realised is that most companies whilst obviously registered in Australia as required by law, are owned and run by foreign nationals.
To my disappointment I realised that most of them (with a few examptions) are just in Australia to make a quick buck and then piss off again back to their own home.

2. Where is the server located?
For me it is really important that the server is located in London or New York and not odd places like Cyprus. The reason for that is no 1: in my opinion/experience any broker with relations to Cyprus is dodgy. no 2: the 4 hour candles are out of whack and screw up your analysis.

3. What are their spreads like?
If you are a scalper you care about spreads, if you trade medium to long term it is not that important. I am a scalper so spreads are a massive deciding factor for the success or failure of my trading business. If you go to myfxbook they have a nice feature that compares the spreads of many brokers real time.

4. Execution time
Once again as a scalper it is really important to me that the trade is put in the market fast as it can cost me a lot of pips if the broker takes too long.

5. Safety of funds
Well, this whole segregated account marketing is not really what keeps your funds safe. I realised that brokers who are also market makers carry the risk and brokers who only do deal through are not carrying any risk. The difference is that market makers indeed make money on the amount you lose whereas deal through brokers only make money on your transactions.
How do you know the difference? All those brokers who give you bonuses and gimmicks to entice you to open up a 10K account, they bank on the fact that most traders lose their money. They can give tight spreads because they make much more on not hedging your bad trades...
And once again, if a firm is owned by real Australians (meaning Australian citizens, not just people who come from Israel or America or Russia to Australia to open up a forex company)the likelyhood that they run off with your funds is much smaller...

6. Customer Service
Stuff happens and I found that it is really important that I have a dedicated account manager who actually answers my emails or phone calls and at least tries to solve my problems ... you should think that this is a given but it is not I found out.

7. How quickly do I get my money back?
what I started to do is I do a trial withdrawal of my funds to see how long the company takes. there is one particular foreign owned broker in Australia who takes ages to pay out the withdrawal requests. They need the liquidity as I found out to keep the minimum requirement of cash in the account so - beware!

Hmmm, I think that is pretty much it...

Hope that helped :-)