We found 11 online brokers that are appropriate for Trading CFD.
In this article of CFD vs Forex we will try to understand what the significant differences between CFD and Forex for new traders. Both are popular financial instruments and traders believe the two can help them in building wealth faster compared to other products. Regulation is very important for both CFD and Forex trading, so make sure when trading these financial instruments your broker is well regulated.
This article is aimed at beginner traders.
Feature | CFD Trading | Forex Trading |
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Underlying Asset | Derivatives - Contracts based on various assets | Currencies |
Asset Range | Wide range (Stocks, indices, commodities, currencies) | Limited to currency pairs |
Trading Contract | Contracts with specific size and currency | Uniform lot sizes (usually 100,000 units) |
Market Forces | Specific to underlying asset (e.g., company news for stocks) | Global economic events, interest rates |
Additional Fees | May include holding fees | Spreads are main cost |
CFD is an abbreviation of Contracts for Difference and it is a derivative financial instrument that offers price speculating opportunities to traders of underlying assets. A trader never takes ownership of the assets in which the contract is based.
A trader gets leverage opportunity with CFDs and this facilitates him or her to open a position with a lower initial capital. The exposure is comparatively large and hence profit is amplified. However, the losses may also go beyond the initial deposit.
Trading CFDs has both advantages and disadvantages, depending on the trader's objectives and risk tolerance.
CFDs use risky leverage which uses a smaller deposit to control a larger trade based on price movement up or down. This can significantly increase potential profits. CFDs also offer the opportunity to go short or long, providing flexibility to profit from both rising and falling markets. Moreover, trading CFDs involves lower entry costs compared to buying the underlying asset outright. They also provide access to a wide range of markets from a single platform.
The same leverage that amplifies profits also increases potential losses, sometimes exceeding the initial investment. This makes CFDs very risky, particularly for inexperienced traders. Additionally, CFDs do not confer ownership of the underlying asset, meaning traders miss out on dividends and voting rights associated with stocks. Overnight holding costs can add up, increasing the cost of trading. Furthermore, the pricing of CFDs is not always transparent, and traders must rely on the broker's integrity and pricing mechanisms.
Forex or FX also known as foreign exchange is a trillion daily global turnover market. It is also referred to as FX. Traders who seek to capitalize on the opportunities with such huge daily transaction volume get involved in Forex trading. They buy and sell currencies. The added advantage of Forex compared to other financial tools is its 24-hour trading hours from Monday to Saturday.
Forex is an over the counter product and not controlled by any central governing body. The negotiations between brokers and dealers are direct through electronic networks.
Trading EUR/USD, whether as a CFD or in traditional Forex, offers opportunities to profit from currency fluctuations. CFD trading provides higher leverage, potentially amplifying profits and losses, while traditional Forex offers a more straightforward approach with typically lower leverage. Both methods require careful risk management, awareness of costs, and an understanding of market dynamics to navigate successfully. Always ensure you are comfortable with the risks involved and consider using stop-loss orders and other risk mitigation strategies to protect your investment.
The trades explained in the example below are a hypothetical scenario and doesn't necessarily reflect typical results.
Trading using leverage is very high-risk in nature and can lead to very large losses.
Contracts for Difference (CFDs for short) trade against your broker based on a financial instruments price movement only using leverage. When trading CFDs on EUR/USD:
Overnight financing fees can apply to CFD positions, held beyond the trading day. CFDs may have overnight financing fees, while Forex trading costs are mainly spreads.
In traditional Forex trading, you buy and sell actual currencies. The principles are similar to CFD trading but with differences in leverage and margin requirements.
Trading in the foreign exchange market, or Forex, has distinct advantages and disadvantages that cater to different types of traders based on their strategies, goals, and risk tolerance.
Forex trading offers significant leverage, allowing traders to control large sums of money with a relatively small initial investment, which can multiply profits if managed carefully. The Forex market operates 24 hours a day during the week, providing continuous opportunities for traders to enter and exit positions at their convenience.
The market's high liquidity makes it easy to execute large trades without significantly affecting the exchange rate. Forex trading also offers the flexibility to profit from both rising and falling markets by trading in diverse currency pairs.
The leverage in Forex trading, while potentially profitable, also poses a high risk as it can lead to substantial losses, potentially exceeding the initial investment. The Forex market can be highly volatile, making it difficult to predict exchange rate movements and manage risk effectively.
Due to its complexity, Forex trading requires a substantial amount of knowledge and experience to navigate successfully. Additionally, the market is affected by numerous factors including economic indicators, political events, and market sentiment, making it challenging to consistently predict outcomes.
Finally, the Forex market involves costs such as spreads and potentially overnight charges, which can erode profits.
There are several similarities between CFD and Forex. Both the financial instruments involve the same kind of trade execution process. In both, a trader can easily take an entry and exit the market following the rise and fall of the financial markets.
Trades on both financial tools can be executed on the same platform by following and analyzing pricing methods and charts of underlying assets. In both kinds, the trades are performed in the OTC market. This means the trades are run electronically and entirely within a banking network. There is no central trade and no physical location.
In both cases the cost of trading is just the spread and no commission or fee. Other financial instruments involve charges in the form of commission or fee.
In both CFD and Forex, a trader does not take possession of the underlying assets. If a trader buys EURAUD, it does not mean that he purchases the euros and there after sells the Australian dollars. He merely speculates on the currency pair’s exchange rate.
Similarly, if the trader buys a CFD on the FTSE 100, he does not own the stocks listed in the FTSE 100 index. He rather speculates on the underlying price of the assets. This is the reason Forex is also considered as a kind of CFD for not taking ownership of the underlying assets.
The primary difference is that the CFD involves various contracts like indices, metals, and energy. Forex on the other hand is purely limited to currency trading.
In CFD a trader can choose different contracts, and these can vary in currency type as well as increment value based on the country where the underlying asset originates. In Forex the opportunity is not so vast. A trader can only trade two currencies against each other. More to this, the trading needs to be in uniform sizes.
CFD is influenced by specific factors like demand and supply or market trends of the commodity while Forex is driven by global events such as international political changes and large employment shifts.
There are some differences between CFD brokers and Forex brokers.
CFD brokers offer contracts that mirror the price movements of a wide range of underlying assets, including stocks, commodities, indices, and bonds. This allows traders to speculate on the rise or fall of these assets without actually owning them. CFD brokers provide a broad spectrum of markets to trade, not just currencies.
The main appeal of CFD trading is the ability to trade on margin (using leverage), which can amplify both profits and losses. CFD trading also allows for easy short selling, making it straightforward to speculate on downward market movements.
On the other hand, Forex brokers, on the other hand, specialize in currency trading. They provide platforms for trading currencies against one another in pairs (e.g., EUR/USD, GBP/JPY).
The forex market is known for its high liquidity and operates 24 hours a day during the week, making it a popular choice for traders around the globe. Forex trading is typically focused on shorter-term strategies and smaller price movements compared to some other assets.
Forex brokers also offer leverage, but since the market is generally less volatile than some CFD markets, the risk levels might be perceived differently.
Key differences include:
Regulation ensures that brokers operate fairly and transparently, protecting traders from fraudulent practices. It also provides a level of security for traders' funds, as regulated brokers must adhere to strict financial standards and reporting requirements.
CFD trading may involve overnight financing fees for positions held beyond the trading day, adding to the cost of trading. In Forex trading, the primary cost is usually the spread, the difference between the bid and ask price, with no additional fees or commissions in most cases.
Higher leverage in CFD trading can amplify both profits and losses. For beginners, this increased risk can lead to substantial losses, so it is essential to use leverage cautiously and employ risk management strategies to protect investments.
In this article, we looked at CFD vs Forex and tried to highlight both similarities as well as differences. We talked about some of the significant driving forces.
The beauty of CFD and Forex is that the initial required capital is lower than other financial products due to the high leverage offered. A trader can gain larger exposure with limited capital. The profits are also magnified.
However, a trader should always consider there may be a darker side of trading and profits cannot be always guaranteed. Losses do exist, but there are risk-management tools available to implement and minimize the risks.
Apart from this, it is always suggested to deal with a reliable, regulated, popular, and trusted brokerage agency for your CFD and Forex needs. A good broker matters the most in yielding positive results.
We have conducted extensive research and analysis on over multiple data points on Cfd Vs Forex to present you with a comprehensive guide that can help you find the most suitable Cfd Vs Forex. Below we shortlist what we think are the best CFD brokers after careful consideration and evaluation. We hope this list will assist you in making an informed decision when researching Cfd Vs Forex.
Selecting a reliable and reputable online CFD trading brokerage involves assessing their track record, regulatory status, customer support, processing times, international presence, and language capabilities. Considering these factors, you can make an informed decision and trade CFD more confidently.
Selecting the right online CFD trading brokerage requires careful consideration of several critical factors. Here are some essential points to keep in mind:
Our team have listed brokers that match your criteria for you below. All brokerage data has been summarised into a comparison table. Scroll down.
When choosing a broker for CFD trading, it's essential to compare the different options available to you. Our CFD brokerage comparison table below allows you to compare several important features side by side, making it easier to make an informed choice.
By comparing these essential features, you can choose a CFD broker that best suits your needs and preferences for CFD. Our CFD broker comparison table simplifies the process, allowing you to make a more informed decision.
Here are the top CFD Brokers.
Compare CFD brokers for min deposits, funding, used by, benefits, account types, platforms, and support levels. When searching for a CFD broker, it's crucial to compare several factors to choose the right one for your CFD needs. Our comparison tool allows you to compare the essential features side by side.
All brokers below are CFD brokers. Learn more about what they offer below.
You can scroll left and right on the comparison table below to see more CFD brokers that accept CFD clients.
Broker |
IC Markets
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Roboforex
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eToro
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XTB
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XM
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Pepperstone
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AvaTrade
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FP Markets
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EasyMarkets
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SpreadEx
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FXPro
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Regulation | Seychelles Financial Services Authority (FSA) (SD018) | RoboForex Lid is regulated by Belize FSC, License No. 000138/7, reg. number 000001272. RoboForex Ltd, which is an (A category) member of The Financial Commission, also is a participant of its Compensation Fund | FCA (Financial Conduct Authority) eToro (UK) Ltd (FCA reference 583263), eToro (Europe) Ltd CySEC (Cyprus Securities Exchange Commission), ASIC (Australian Securities and Investments Commission) eToro AUS Capital Limited ASIC license 491139, CySec (Cyprus Securities and Exchange Commission under the license 109/10), FSAS (Financial Services Authority Seychelles) eToro (Seychelles) Ltd license SD076 | FCA (Financial Conduct Authority reference 522157), CySEC (Cyprus Securities and Exchange Commission reference 169/12), FSCA (Financial Sector Conduct Authority), XTB AFRICA (PTY) LTD licensed to operate in South Africa, KPWiG (Polish Securities and Exchange Commission), DFSA (Dubai Financial Services Authority), DIFC (Dubai International Financial Center), CNMV (Comisión Nacional del Mercado de Valores), KNF (Komisja Nadzoru Finansowego), IFSC (Belize International Financial Services Commission license number IFSC/60/413/TS/19) | Financial Services Commission (FSC) (000261/4) XM ZA (Pty) Ltd, Cyprus Securities and Exchange Commission (CySEC) (license 120/10) Trading Point of Financial Instruments Ltd, Australian Securities and Investments Commission (ASIC) (number 443670) Trading Point of Financial Instruments Pty Ltd | Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC), Cyprus Securities and Exchange Commission (CySEC), Federal Financial Supervisory Authority (BaFin), Dubai Financial Services Authority (DFSA), Capital Markets Authority of Kenya (CMA), Pepperstone Markets Limited is incorporated in The Bahamas (number 177174 B), Licensed by the Securities Commission of the Bahamas (SCB) number SIA-F217 | Australian Securities and Investments Commission (ASIC) Ava Capital Markets Australia Pty Ltd (406684), South African Financial Sector Conduct Authority (FSCA) Ava Capital Markets Pty Ltd (45984), Financial Services Agency (Japan FSA) Ava Trade Japan K.K. (1662), Financial Futures Association of Japan (FFAJ),, FFAJ, Abu Dhabi Global Markets (ADGM)(190018) Ava Trade Middle East Ltd (190018), Polish Financial Supervision Authority (KNF) AVA Trade EU Ltd, Central Bank of Ireland (C53877) AVA Trade EU Ltd, British Virgin Islands Financial Services Commission (BVI) BVI (SIBA/L/13/1049), Israel Securities Association (ISA) (514666577) ATrade Ltd, Financial Regulatory Services Authority (FRSA) | CySEC (Cyprus Securities and Exchange Commission) (371/18), ASIC AFS (Australian Securities and Investments Commission) (286354), FSP (Financial Sector Conduct Authority in South Africa) (50926), Financial Services Authority Seychelles (FSA) (130) | Cyprus Securities and Exchange Commission (CySEC) (079/07) Easy Forex Trading Ltd, Australian Securities and Investments Commission (ASIC) (Easy Markets Pty Ltd 246566), British Virgin Islands Financial Services Commission (BVI) EF Worldwide Ltd (SIBA/L/20/1135), Financial Sector Conduct Authority South Africa (FSA) EF Worldwide (PTY) Ltd (54018), FSC (Financial Services Commission) (SIBA/L/20/1135), FSCA (Financial Sector Conduct Authority) (54018) | FCA (Financial Conduct Authority) (190941), Gambling Commission (Great Britain) (8835) | FCA (Financial Conduct Authority) (509956), CySEC (Cyprus Securities and Exchange Commission) (078/07), FSCA (Financial Sector Conduct Authority) (45052), SCB (Securities Commission of The Bahamas) (SIA-F184), FSA (Financial Services Authority of Seychelles) (SD120) |
Min Deposit | 200 | 10 | 50 | No minimum deposit | 5 | No minimum deposit | 100 | 100 | 25 | No minimum deposit | 100 |
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Used By | 200,000+ | 730,000+ | 35,000,000+ | 1,000,000+ | 10,000,000+ | 400,000+ | 400,000+ | 200,000+ | 250,000+ | 60,000+ | 7,800,000+ |
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Accounts |
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Platforms | MT5, MT4, MetaTrader WebTrader, Mobile Apps, iOS (App Store), Android (Google Play), MetaTrader iPhone/iPad, MetaTrader Android Google Play, MetaTrader Mac, cTrader, cTrader Web, cTrader iPhone/iPad, cTrader iMac, cTrader Android Google Play, cTrader Automate, cTrader Copy Trading, TradingView, Virtual Private Server, Trading Servers, MT4 Advanced Trading Tools, IC Insights, Trading Central | MT4, MT5, R Mobile Trader, R StocksTrader, WebTrader, Mobile Apps, iOS (App Store), Android (Google Play), Windows | eToro Trading App, Mobile Apps, iOS (App Store), Android (Google Play), CopyTrading, Web | MT4, Mirror Trader, Web Trader, Tablet, Mobile Apps, iOS (App Store), Android (Google Play) | MT5, MT5 WebTrader, XM Apple App for iPhone, XM App for Android Google Play, Tablet: MT5 for iPad, MT5 for Android Google Play, XM App for iPad, XM App for iOS (App Store), Android (Google Play), Mobile Apps | MT4, MT5, cTrader,WebTrader, TradingView, Windows, Mobile Apps, iOS (App Store), Android (Google Play) | MT4, MT5, Web Trading, AvaTrade App, AvaOptions, Mac Trading, AvaSocial, Mobile Apps, iOS (App Store), Android (Google Play) | MT4, MT5, TradingView, cTrader, WebTrader, Mobile Trader, Mobile Apps, iOS (App Store), Android (Google Play) | easyMarkets App, Mobile Apps, iOS (App Store), Android (Google Play), Web Platform, TradingView, MT4, MT5 | Web, Mobile Apps, iOS (App Store), Android (Google Play), iPad App, iPhone App, TradingView | MT4, MT5, cTrader, FxPro WebTrader, FxPro Mobile Apps, iOS (App Store), Android (Google Play) |
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Risk Warning | Losses can exceed deposits | Losses can exceed deposits | 51% of retail investor accounts lose money when trading CFDs with this provider. | 69% - 83% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.12% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. | 75-95 % of retail investor accounts lose money when trading CFDs | 71% of retail investor accounts lose money when trading CFDs with this provider | Losses can exceed deposits | Your capital is at risk | Losses can exceed deposits | 75.78% of retail investor accounts lose money when trading CFDs and Spread Betting with this provider |
Demo |
IC Markets Demo |
Roboforex Demo |
eToro Demo |
XTB Demo |
XM Demo |
Pepperstone Demo |
AvaTrade Demo |
FP Markets Demo |
easyMarkets Demo |
SpreadEx Demo |
FxPro Demo |
Excluded Countries | US, IR, CA, NZ, JP | AU, BE, BQ, BR, CA, CW, CZ, DE, ES, EE, EU, FM, FR, FI, GW, ID, IR, JP, LR, MP, NL, PF, PL, RU, SE, SJ, SS, SL, SI, TL, TR, DO, US, IT, AT, PT, BG, HR, CY, DK, FL, GR, IE, LV, LT, MT, RO, SK, CH | ZA, ID, IR, KP, BE, CA, JP, SY, TR, IL, BY, AL, MD, MK, RS, GN, CD, SD, SA, ZW, ET, GH, TZ, LY, UG, ZM, BW, RW, TN, SO, NA, TG, SL, LR, GM, DJ, CI, PK, BN, TW, WS, NP, SG, VI, TM, TJ, UZ, LK, TT, HT, MM, BT, MH, MV, MG, MK, KZ, GD, FJ, PT, BB, BM, BS, AG, AI, AW, AX, LB, SV, PY, HN, GT, PR, NI, VG, AN, CN, BZ, DZ, MY, KH, PH, VN, EG, MN, MO, UA, JO, KR, AO, BR, HR, GL, IS, IM, JM, FM, MC, NG, SI, | US, IN, PK, BD, NG , ID, BE, AU | US, CA, IL, IR | AF, AS, AQ, AM, AZ, BY, BE, BZ, BT, BA, BI, CM, CA, CF, TD, CG, CI, ER, GF, PF, GP, GU, GN, GW, GY, HT, VA, IR, IQ, JP, KZ, LB, LR, LY, ML, MQ, YT, MZ, MM, NZ, NI, KP, PS, PR, RE, KN, LC, VC, WS, SO, GS, KR, SS, SD, SR, SY, TJ, TN, TM, TC, US, VU, VG, EH, ES, YE, ZW, ET | BE, BR, KP, NZ, TR, US, CA, SG | US, JP, NZ | US, IL, BC, MB, QC, ON, AF, BY, BI, KH, KY, TD, KM, CG, CU, CD, GQ, ER, FJ, GN, GW, HT, IR, IQ, LA, LY, MZ, MM, NI, KP, PW, PA, RU, SO, SS, SD, SY, TT, TM, VU, VE, YE | US, TR | US, CA, IR |
You can compare CFD Brokers ratings, min deposits what the the broker offers, funding methods, platforms, spread types, customer support options, regulation and account types side by side.
We also have an indepth Top CFD Brokers for 2025 article further below. You can see it now by clicking here
We have listed top CFD brokers below.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Copy trading is a portfolio management service, provided by eToro (Europe) Ltd., which is authorised and regulated by the Cyprus Securities and Exchange Commission.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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