My first CFD broker - advice please

[Bollard]

Hello,

Im looking at dipping my toes into CFD trading. Being a full time student, im not going to dedicate too much cash (£300 - 500 - so need no minimum deposit requirements) and am obviously looking for somewhere with low / no fees and as tight a spread as possible (i spose what everyone wants!)

I imagine ill mainly be trading commodities, UK and US equity shares.

Any reccomendations? Im looking at IG Markets, CMC Markets and Capital CFDs. Ive had a go with a few demo platforms and dont really have enough experience to make any meaningful judgements, so your comments would be much appreciated.

Cheers

 

[anley]

CFDs aren't for you with that sort of capital and I doubt any firm will let you open an account, they would I think require a minimum, don't know how much but I'd want at least £5k if I was the broker.

Try Spread Betting. Finspreads is probably the best for your capital as their minimum trade is 50p per point, IG and Capital are £1.

Spreads won't be that much of a problem if you look to trade decent moves but if short term/day trading the spread will slowly eat your account till your money becomes the broker's money.

Good luck.

 

[cafers]

When I was a student, I started off with that kind of money just trading penny shares on the AIM. Used Hargreaves Lansdown who are okay, but I'm certain there are better options available.

Depends if you want a leveraged product or not. Spread betting / CFD's are leveraged, while buying shares isn't per se.

 

[trader30]

Hi Bollard,

There are a few things to consider here.

For CFD trading on equities, most CFD firms will have a minimum commission for each trade, usually about 10 pounds which is obviously too much for a 500 quid account. Some firms remove the minimum if you deposit more (have a premium account etc) which might be worth considering if you insist on trading equities through CFDs. You might need to deposit say 5000 quid but then you can just risk 500 and therefore youll only pay 10bp with no minimum.

Your other options are trading other instruments using CFDs (you only pay comm on equities) or use financial spread betting which doesnt have any commission (the costs are built in the spread therefore no minimum). Commodities tend to have larger % spreads. Indices might be worth a look as lower % spreads.

But using spread betting means you can trade what you like as youll have no minimum fee.

the main problem youre facing tho in my view is only trading with 500 quid. your stops are going to have to be so tight to follow any type of decent money management plan and the spread you pay could be up to a few % of your account.

im not saying you cant make money starting with 500 but if you want to do it following a sensible plan it will take you AGES to get up to decent sums and probably wont be worth your time.

the alternative is take a much more speculative approach but then you might as well go to the casino or stick it on a horse. for me "trading" with 500 quid isnt trading. its just red/black and that way youll blow up pretty soon.

good luck! (tho luck has nothing to do with it!)

 

[jtrader1001]

Before even attempting to trade CFDs set up a trial account and view as many instructional websites before getting started as the risks are well documented!

 

[enragedcow]

i'm in the same position as you OP

full time student trying to start trading, i started with $1000 NZD

i found from initial loss and subsequent paper trading that trading share CFDs on such a small account was unprofitable (i also found buying shares in a mine that exploded 2 years later is unprofitable)

i'm with CMC i like their platform it's nice and simple but i've moved from shares to forex as the commissions were killing my pretend account

also good boy for demoing, i got too excited and jumped straight into trading - trial by fire...