Picking a ZuluTrade Brokerage?

When picking a ZuluTrade brokerage there are three main things to consider; 

  1. Slippage
  2. Spreads 
  3. Regulation 
Today we are going to look at the different ZuluTrade supported brokerages and compare them on the above criteria. Going with a brokerage which is strong in all three areas is a important aspect of ZuluTrade success. 
First off, I am going to look at Slippage and I have undertaken some original research in regard to which ZuluTrade supported brokerage has the lowest slippage rates. To do this I looked at the slippage rates experienced by traders following some of the Top ZuluTrade Signal Providers in the last year. Through my research I discovered that the brokerages with the lowest Slippage where as follows:  
Rank Broker Slippage (Pips) Regulation
1 AAAFx 0.27 HCMC (Greece MiFID)
2 GO Forex 0.43 CySEC (Cyprus MiFID)
3 Weltrade 0.61 Unregulated
4 Gain Australia 0.67 ASIC (Australia)
5 Gain UK 0.7 FSA (UK MiFID)
6 COLMEX 0.73 CySEC (Cyprus MiFID)
7 FX Primus 0.83 FSC
8 FXDD MT 0.88 MFSA (Malta MiFID)
10 Xemarkets 0.95 CySEC (Cyprus MiFID)
11 FX SOL UK 0.98 FSA (UK MiFID)
As you can see their were a total of 11 brokerages whose average slippage was under a Pip. It’s my opinion that you would want to be operating with a brokerage whose slippage on average was under a Pip, anything more would start to eat into your potential profits. AAAFx which is owned and fully integrated with the ZuluTrade platform unsurprisingly offers the lowest rate of slippage. The fact that there are a number of European regulated brokerages on the list means that there is little reason to use an unregulated offshore brokerage. Every brokerage bar two who had average slippage rates below 1 Pip, were MiFID regulated ensuring a minimum standard of regulation and some limited financial compensation should the organisation go belly up.  

The second important thing to consider when picking a brokerage to operate with is to consider whether the said brokerage has competitive spreads. The wider the spread the more your potential profits will be eaten into. So the next step is to compare spreads between the brokerages which have the best execution with the ZuluTrade platform. The following table shows the average spreads offered on the four major currency pairings, while the spreads on more exotic currency pairings will likely have greater variation the majority of trading on ZuluTrade is in the major currency pairings.  

Rank Broker Slippage (Pips) EUR/USD USD/CHF GBP/USD USD/JPY Slippage & Spread Avg
1 Gain Australia 0.67 1.2 2 1.5 1.2 2.145
2 AAAFx 0.27 1.9 1.9 1.9 1.9 2.17
3 Gain UK 0.7 1.6 1.5 1.9 1.3 2.275
4 Weltrade 0.61 2 3 3 2 3.11
5 Xemarkets 0.95 1.9 2.6 2.5 2.3 3.275
6 FX Primus 0.83 2 3 3 2 3.33
7 FXCM UK 0.94 2.5 2.5 2.6 2.3 3.415
8 GO Forex 0.43 3 3 3 3 3.43
9 COLMEX 0.73 3 3 3 3 3.73
10 FXDD MT 0.88 1.8 3.7 4 2.5 3.88
11 FX SOL UK 0.98 3 4 4 3 4.48

As you can see when one takes Spreads into account, it is actually Gain Australia which offers the best service for those trading with ZuluTrade accounts closely followed by AAAFx and Gain UK. When you take into account Spreads companies such COLMEX, FXDD and FX Sol UK get left far behind. There seem to be about 8 different options which offer you a total trade cost of lower than 3.5 pips which is the most your going to want to pay for opening a trading positions. 

Now we get to the final important category. Regulation is important for two reasons, one proper regulation protects you against the possibility of the brokerage collapsing. This is something that becomes very important when an individual will be trading a large amount of capital. For instance a trader who is with a MiFID regulated brokerage will have their deposits protected up to at least 20,000 Euros if they brokerage was to collapse. While MiFID ensures a minimum standard of regulation, the strength of the regulation does vary body to body. For instance CySEC and HCMC are considered to be some of the weaker MiFID regulated bodies, this being said I would be happy with doing business with any of the MiFID regulated brokerages on the list. Those in Australia would probably be best to go with Forex.com Australia (aka Gain Australia) who are regulated by the very competent ASIC. The only two brokerages on the list I would avoid are FSC regulated FX Primus and unregulated Weltrade while I know of customers who are happy with both, the lack of serious regulation in both cases would worry me deeply. 

So what brokerages would I recommend for those who want to trade on ZuluTrade. Well that really depends on what region you live in. 

Europe: xemarkets, AAAFx, Forex.com (UK) 
Australia: Forex.com (AUS)

ZuluTrade Slippage

ZuluTrade, is a great social trading platform however many people complain that they often experience heavy slippage when copy some of the signal providers on ZuluTrade. This slippage can sometimes seriously eat into a traders profits. So I undertook an investigation to establish which brokerages experienced the worst rates of slippage. To do this I looked through a selection of ZuluTrades most sucessful signal providers and averaged out the slippage each brokerage had over the past year. 

The Top Ten Brokerages 

Rank Broker Slippage (Pips)
1 AAAFx 0.27
2 GO Forex 0.43
3 Weltrade 0.61
4 Gain Australia 0.67
5 Gain UK 0.7
6 COLMEX 0.73
7 FX Primus 0.83
8 FXDD MT 0.88
9 FXCM UK 0.94
10 Xemarkets 0.95
Unsurprisingly, AAAFx had the leas slippage out of the all brokerages offered on the ZuluTrade platform. As AAAFx is totally integrated with the platform this is what you would expect. However, much of the rest of the list is quite shocking for instance I do not think that many people would expect that some small players in the world of Forex would suffer as little as they do. Slippage of under a single Pip would still allow most people to make money from copying ZuluTrade’s better signal providers. Both Gain Australia and Gain UK did pretty well (for those not in the know Gain operates Forex.com). Lagging back in 10th place with Slippage of less than 1 Pip is xemarkets of Cysec. So it does appear that there are a number decent regulated alternatives to trading with AAAFx, however none of the alternatives come close to AAAFx in terms of slippage. However a number of these brokerages listed offer spreads that are considerably tighter than the Spreads offered on AAAFx. This means that AAAFx may not be the best choice for those wishing to use the ZuluTrade platform.   

Now for the naming and shaming of the brokerages that suffer the most slippage on the ZuluTrade platform. 
Rank Broker Slippage Pips
34 FXTG 2.24
35 IKON NZ 2.36
36 ACM GOLD 2.72
37 YouTradeFX 3.29
38 KVB KUNLUN 4.28
Some of the slippage experienced with these brokerages is completely outrageous. KVB KUNLUN customers suffered average of 4.28 Pips of Slippage which would seriously eat into a traders profits. Again things aren’t much better for customers of YouTradeFX who suffer an average of 3.29 Pips of Slippage. Whats worse is that some of these brokerages featured on our shame list aren’t particularly competitive when it comes to the Spreads on offer. If you are currently trading with one these brokerages I suggest that you move to a different provider.  
My study of Slippage on ZuluTrade only featured 38 brokerages, this due to the fact that for some of the less commonly used brokerages didn’t have large enough data sets for me to be able to compare them to the properly to the 38 brokerages which did feature in the study. What the study does show is that those using ZuluTrade should ensure they pick a competitive brokerage in terms of both slippage and spreads.

Guide to Picking a ZuluTrade signal provider

ZuluTrade offers those interested in Social Trading a wide range of different signal providers to choose from. A signal provider, provides the signals which allow your account will follow and therefore will determine your trading success. This makes picking the right signal providers absolutely vital and while there are many good signal providers on the ZuluTrade network there are also some awful signal providers. 

Perform a Detailed Examination of their Performance 
ZuluTrade allows you a number of different indicators into a traders past performance including the total profit made, the number of weeks the trader has been active, ROI% (percentage return on investment), average pips per trade, average trade time, worst trade, best trade and necessary minimum equity. I look for a number of different things when evaluating each of these different metrics. 

Total Profit: This is measured in Pips, which means its a pretty worthless metric. Different accounts have been active for different periods of time and many accounts have had performance vary over time. For instance a 9 month account may have had a great first six months and then a horrible last three months. You won’t want to follow such a trader even if they have had success in the past, as I believe consistent success is the most important metric.  

ROI (Return on Investment): Return on Investment marks the total return made on the traders initial investment obviously the higher the return on the investment the better. However, traders who have hugely remarkable returns on investment might throw up some red flags as such huge returns likely indicate a high risk strategy. While such strategies can be highly effective they can often blow up in a traders face and lead to accounts being blown. This is why it would be foolish to invest on ROI alone, a trader should take into account other factors. 

Winning Trades (%): Obviously the higher the percentage of winning trades the better and I generally look for a trader to have had a long trading history and a percentage of above 70%. However again one shouldn’t rely on this as their only indicator for instance a trader who averages 12 pips per trade but only Wins 70% of the time is superior to one who averages 1 pip per trade but Wins 94% of the time. A long consistent winning history of above 70% should be enough to put your faith in a particular trader providing other things are looking okay.  

Average Pips Per Trade: This is quite an important metric of performance and what you should be looking for will depend partly on what brokerage you are using ZuluTrade, your going to want to look for more Pips per trade if your brokerage has wider spreads or significant slippage. Also while others won’t be as bothered as me I don’t like trading strategies which open positions in order to earn a couple of Pips. It just doesn’t seem to make sense from a risk management point of view, I generally stick to traders who average in excess of 5 Pips per trade.  

Average Trade Time: While not particularly important in determining whether a trader is reliable, the Average Trade time has a varying importance depending on the rollover/overnight costs that your brokerage charges you. If you have significant overnight costs to take account of your probably going to want to give traders who keep trades open for a couple of days a miss. Things like this depend on the trading conditions that your brokerage offer you. 

Maximum Draw-Down: The bigger the maximum draw-down generally the riskier the trader is. Preferably you would look for a trader who had a draw-down of less than 10%, though I will sometime place money with traders who have draw-down’s of up to 15%. Anymore than this strikes me that the trader is practicing poor money management. 

Best/Worst Trade: I don’t pay particular attention this metric and generally just ignore it, I’d rather pay more attention to the maximum draw-down.  

Such a detailed analysis of these metrics should help you determine whether it would be a good decision to follow a particular trader, they also give a good basis to which you can compare two different signal providers. If you want to go into further detail you can do a trade by trade analysis of the signal providers positions and take a look at them on charts to see whether they had good reasons to enter into the various positions opened. Most of the time you won’t need to do such analysis. Just looking at the key metric should be enough. 

By Ed

Binary Option Platform Providers Compared

The non-exchanged traded Binary Options industry has expanded vastly since their inception in early 2008. The growth in the number of competing Binary Options platforms has been powered by a number of platform providers providing cost effective and easy to implement platforms. Whether such growth can continue indefinitely seems questionable but today we are going to outline the offerings of the three largest Binary Option platform providers. 

SpotOption is the trading name of s.o SpotOption Ltd. The company was founded in early 2008 and sees itself as one of the leaders in the Binary Options marketplace. Currently SpotOption powers over 80 different Binary Option platforms making it the biggest Binary Options platform provider. SpotOption also holds the honor of being the first Binary Options company to become regulated under CySEC after they changed their position regarding the regulation of Binary Options.  Again SpotOption can also claim to have provided the platform for the first Binary Option provider to become CySEC regulated. SpotOption provides a 360 solution providing everything from the platforms front end, trading engine, risk management, payment processing, customer relations and a content management system. Meaning that those who opt for a SpotOption provider can get hold of a platform that almost runs itself. 
For a good example of SpotOption platform one should check out Banc De Binary, who happen to hold CySEC regulation and our one of SpotOptions biggest brands. SpotOption supports data from a number of different financial feeds including Leverate, Reuters and Bloomberg allowing the platform providers to pick which data feed they utilize. However, SpotOption claim that the real strength of their platform is their risk management they provide. SpotOption provide a five tiered risk management system which they claim can help ensure platform providers make a consistent 10-12% profit. The Client can access all the features they need through the CRM including information on customer leads, depositor management, back office features, accounting and affiliates. SpotOption also provides one of the cheaper platform solutions which is partly why it is so popular. 
Launched in 2009, Techfinancials was launched by a group of financial experts who wanted to enter into the lucrative Binary Options marketplace. Techfinancials supports a much smaller number of operating companies, though their clients do include a number of big names including 24Options. Techfiancials see Binary Options as instrument which will allow individuals the ability to access the financial markets and envisage CFD companies offering Binary Options alongside their traditional Contracts for Difference. The Techfinancials Binary Option platform is powered by Techfinancials unique Ocra+ engine which uses a unique algorithmic model to price Binary options, which then allows traders to close positions/rollover open positions during trading. The Ocra+ engine also allows Binary Options trading to be plugged into the MetaTrader 4 engine which is a pretty nice feature of the platform. Again Techfinancials have a comprehensive back office features largely adapted from online gaming world allowing users of the platform full access to various features including affiliates, marketing, admin and various types of banking functions. The Techfinancials platform is available in both white label and in operator format. For further information on the platform check out their website
MarketsPulse, prides itself in providing Binary Options solutions for already established FX Trading companies and has clients both regulated by the Japanese FSA and Australia’s ASIC. This means the platform is aimed towards those who already have active FX trading services and MarketsPulse is unique in the fact that it doesn’t operate a Binary Options platform powered by their own software meaning they do compete with their clients for customers. They also claim to have a unique Binary Options algorithm powering their risk management systems as they are the only Binary Option platform which can offer clients up to 90% returns on many different Binary Options. However, the MarketsPulse solution is considerably more pricey than the solutions offered by the other major providers. The platform also has the bonus of being able to support any data feed. The platform also allows its users a full backend to allow the company running the service to access everything that they need. While the offering by MarketsPulse is pretty impressive it is going to be out of the price range of most people who want to open a Binary Options brokerage.  

Margin vs. CFD Trading

Many people are confused with the difference between Margin trading and Contract for Difference, while there are similarities between the two there are several important differences between the two instruments. 

Both forms of trading use Margin. When you open a Margin FX or Stock position you only have to put up a small percentage of the cash up front effectively borrowing the rest of the money for the position from the broker. You may be able to open a $5,000 position with only $500 in your trading account for instance. The same thing happens when you open a position with a Contract for difference provider with the trader being able to open a position worth a $5,000 with only $50 in their account. The difference is when you open a Contract for Difference position you do not actually own the underlying financial instrument in question, you are entering into a Contract with a counter party namely your brokerage. Where as with Margin Trading you are the owner of the underlying instrument though you have borrowed a significant amount of the money from the brokerage in order to take the position. Both Margin Trading and CFD offer different benefits, though it should be noted both pose significant risks. 

I am going to lay out a number of bullet points showing the important differences between the instruments:

  • Leverage – CFD’s generally give the trader the opportunity to trade with significantly more leverage, this is due to the fact there is no exchange of a physical asset going on. With the extra leverage CFD’s offer greater possible returns as well as the possibility for greater losses. 
  • Spreads – Margin Trading has the advantage of offering tighter spreads on the instruments offered this is due to the fact that Margin trader is essentially using a broker with Direct Market access who makes their money by charging commission on trades. 
  • Liquidity – CFD’s (Specifically those offered by Market Makers) generally provide better liquidity than Margin Trading. There may be times when Market conditions mean there is very limited Market liquidity meaning trade size may be limited. As CFD’s do not require the trader to own the underlying instrument they wish to trade. 
  • Stop Losses – Again Margin Trading customers can generally not use Guaranteed Stop losses due to the fact there is no guarantee that a trade can be closed at a particular market price. 
  • Account Size – You will generally find Margin Trading requires new traders to deposit a significant amount of money in order to be able to trade the financial markets. While Contract for Difference providers will accept customers depositing as little as $5, though this would involve taking on a significant amount of leverage with every trade. 
Margin Trading is probably better suited to traders with significant capital at their disposal. Though you will find many professional traders who operate both Margin and CFD trading accounts to take advantage of the benefits offered by each form of trading.

How do Forex rebate schemes work?

A Forex rebate scheme is a scheme which offers potential traders the possibility of being refunded some the spreads they are charged by brokerages. The schemes are members of affiliate programs for the brokerages they promote meaning they collect a share of the revenue made by the brokerages you sign up to. They then share this revenue with you making money for themselves while also giving you cash back. For instance the xemarkets affiliate scheme offers it’s members up to 50% revenue share for each customer they sign up. So then the Forex  rebate scheme will then share this revenue with the customer who signed up through there link a certain percentage of the revenue earned from the affiliate program. Meaning the original customer gets pay out when a certain amount of income has been generated from the affiliate program.

Many of these schemes are completely legitimate and will pay you a share of the earnings the broker makes from you. The amount of rebate you will receive varies between various brokerages due to the fact that different affiliate schemes offer different revenue share. Signing up to rebate scheme will not harm your rights with the brokerage and can help you earn extra cash or at least reclaim some of your losses. There are a number of different Forex rebate schemes out there.  

Made To Trade 

Here at Made To Trade, we have begun to run our own Forex rebate scheme for information on the scheme and the different brokerages we support on the scheme send an us an email at: made_to_trade@hotmail.com. We can offer significant rebates for a number of different brokerages, we can also offer advice on which brokerage would be best for you. While we do not offer they widest range of brokerages around we pride ourselves only working with European Regulated Brokerages, as well as providing a personal service to those who want to get Forex rebates from a selection of regulated brokerages.   
Cash Back Forex 
Cash Back Forex, are one of the oldest Forex Rebate websites on the internet and offer Forex cash for a wide selection of regulated and unregulated brokerages. Some of the rates offered by CashBack Forex are among the best in the rebate business and they claim to be able to beat the rates offered by their competitors. Meaning that Cashback Forex offers one of the better Forex rebate schemes available on the internet. 

ZuluTrade: An Experiment

ZuluTrade - Autotrade the Forex Market like never before!

Social Trading is very hot at the moment with all the major CFD providers coming out with their own social trading platforms or providing support for other social trading platforms such as ZuluTrade and Tradeo. I decided to investigate whether social trading works or whether it doesn’t live up to the hype. For this I decided to open demo account at the most popular social trading network ZuluTrade.

I started by opening a ZuluTrade demo account with £5000 play money. I then proceeded to pick four different signal providers with a good track record and limited Draw Down, in the hopes of minimizing risk. After having made my various picks I waited and let the signal providers make there moves. Apart from this I used the default settings suggested by the providers and ZuluTrade.  

According to ZuluTrade if I had followed the signal providers I had chosen from 2010 until now my £5000 play account would have grown have doubled in size and been worth over $10,000 now. It wasn’t until the next day did any of my signal providers open any positions, however things got off to a good start with the said signal provider opening three positions all of them being reasonably profitable.

After this I simply left the four signal providers I had chosen to do their work and trade the Forex markets. After 14 days about half way through the month the traders I had followed had made me £250 from my initial £5000 deposit. From the below graph it appears that my account hasn’t had a negative day, which is really quite impressive. In half a month I had made a 5% return which is very impressive over such a short period of time. 

After 21 days, my demo account was up by £458 a return on investment of 9% with still another 7 days to go, it seems possible to get a return on investment of over 10% a month by copying some of the best traders on ZuluTrade. It seems that if you pick your signal providers wisely you can make some serious profits with ZuluTrade without having to micro manage your account to much. 
I therefore recommend that people at least try out the 30 day demo account and decide whether ZuluTrade is suitable for them. I would personally contend that ZuluTrade is the best social trading platform currently available and seems superior to eToro and Tradeo’s offerings. Obviously there are still considerable risks involved with trading at ZuluTrade, however for some I am sure that using ZuluTrade would be a great option.

Do Fibonacci retracements work?

For those who do not not know what a Fibonacci retracement is I will give a quick introduction. Fibonacci retracements are a popular piece of technical analysis used to determine resistance and support levels. They are named so due to their use of the Fibonacci sequence discovered by Leonardo of Pisa who was also known as Fibonacci. The use of Fibonacci retracements is based on the idea that markets will ultimately retrace a portion of a move in a predictable manner, after which the market will continue to move in the original direction. 

Do Fibonacci retracements work? Well there are certainly a huge number of people who claim that you can make huge profits from using Fibonacci retracements. However I think there are plenty of reasons to be skeptical about the use of Fibonacci retracements. For example, Burton Malkiel who is best known for his book A Random Walk Down Wall Street completely rejects the idea that you can use Fibonacci retracements profitably. When he studied the use of Fibonacci retracements and technical analysis in general he found that one could not make any valuable predictions using Fibonacci retracements.

What then explains the appearance of Fibonacci retracement levels acting as support or resistance levels? Well according to Malkiel, asset prices display signs of a random walk and the fact that Fibonacci retracements appear to sometimes act as support and resistance levels can be explained away by pure coincidence. With traders being unable to outperform market averages over the long term.

This view seems to align with my own experience with Fibonacci retracements. I have never found them to be a particularly reliable predictor of market behaviour, for example take a look at the above 5 Minute chart (Click Image to Englarge). I have highlighted a number of times when it appears that the Fibonacci retracments are acting as support and resistance levels, but as you can see more than most of the time they don’t appear to work. I have spent today drawing a number of different retracements with very little success. 

One reason that Fibonacci retracements are supposed to work is due to the fact that a large number of traders put their faith in them. This makes Fibonacci retracements some kind of self fulfilling prophecy with traders opening and closing position on the basis of these retracement lines. As I see it, there are two problems with this view. Firstly, I’m not sure that many traders do put faith in Fibonacci retracements and even if a decent proportion do this may still not be enough to sway the market. Secondly, Fibonacci retracements are quite subjective in the sense that it is possible to draw a trend line in a number of different ways, each which would effect where the retracemnts are placed.  

In conclusion I really sincerely doubt whether Fibonacci retracements can be used on their own to any effect. For me the jury is still out on whether they can be used in conjunction with other forms of technical analysis, but personally I think any application that Fibonacci retracements can have is really quite limited.

An Introduction to Trading Gold

Gold has been greatly valued by humans due to it’s aesthetic qualities and it’s general malleability. Gold has been at the center of human commerce since the beginning of recorded history and their is bountiful evidence to suggest that Gold was used as currency in ancient Middle Eastern Societies over 2,500 years ago. This makes Gold the oldest form of currency that is still in use today. Thus Gold has a long historical track record of being a store of value, with its value having endured through periods of war, famine and other great historical events. This is why Gold is often seen as the ultimate safe haven asset. In addition, Gold also has a number of important industrial applications.

Since the financial crisis of 2008, the interest in trading Gold has risen significantly with Gold prices skyrocketing as investors and individuals look for a safe haven. With Gold prices hitting an all time high of above $1900 in late 2011. This short introductory post will discuss some of the basics of Gold trading and the factors that affect Gold prices. 

Physical gold is generally held to be valuable due to the fact that it has many of the key qualities one would want from a currency. Gold is scarce, durable, portable, uniform and widely accepted. This wide acceptance is part due to the fact that Gold has a long history of being widely accepted. The majority of people who trade Gold never take delivery of their Gold bullion but rather focus on the current spot gold price, which is based on the price of the nearest futures contract on the New York COMEX (Commodity Exchange). This means the most common way to trade Gold is either through futures contracts themselves or through derivatives based on the price of future contracts.  

In Europe, the most popular way to trade Gold is through a type of derivative known as CFD or Contract for difference. CFD’s are a leveraged instrument meaning that it is possible to trade several thousand euros worth of Gold with a much smaller initial margin deposit. This leverage works in your favor when things go your way multiplying your profits, while working against you when things don’t go your way multiplying your loses. This makes risk management and stop losses very important.  

Gold is one of the most difficult assets to value, this is due to the fact that in someways Gold is similar to a currency and in other regards it much closer to commodities such as Oil or Corn. Unlike normal currencies and stores of value, Gold is not supported by the strength of an underlying economy. Gold is also unlike Oil or Natural Gas, as it fluctuates independently of industrial supply and demand.   

A very reliable determinant of what will happen with Gold prices is the level of real interest rates. The real interest rate is the rate of interest minus inflation. When real interest rates are low or negative investments such as Cash savings or Bonds tend to have a low or negative real rate of return. This in turns pushes investors to seek alternative ways protect their wealth with Gold being seen as a good store of value. On the other hand when real interest rates are strong investors tend to move their money out of Gold into other assets in order to take advantage of the strong real interest rate.  

Short term traders have often found that technical trading strategies can be very effective when it comes trading Gold. A number of different strategies can be easily adapted to the Gold market and many have found the durable trends which Gold tends to form to be very profitable. Those looking to trade Gold with a longer term perspective may want to monitor Gold prices against the rate of real interest rates.

How to pick a Brokerage: 5 Easy Steps

The World is a flood with different Forex brokerages and trying to decide which Brokerage to deposit with can This article isn’t going to mention or name any brokerages it’s merely meant to provide a guide on how to find the best brokerage for you with a series of helpful hints. 

1. Determine What Instrument You Intend to Trade  
Not all brokers offer all instruments. Many Contract for difference providers are limited to Forex, Commodities and Indices, while others offer more exotic instruments such as Bonds and ETF’s to trade. If there is one particular instrument you want to trade whether that be a Forex pairing or a particular ETF you have developed an arbitrage strategy for, your going to want to do a lot of your research around which brokerage is going to give you the best trading conditions for a particular instrument. If your interested in a more general range of instruments then work out which broker provides the best overall level of service for that instrument.

2. What your trading style will be and how that fits with the Brokerage  
Many brokerages have different rules and terms when it comes to CFD trading. For example a number of brokerages completely ban scalping or partly ban scalping activity. Rules surrounding MetaTrader Expert Advisors also vary from broker to broker, some brokers allow unlimited scalping while others don’t let scalping expert advisors on their sites. News traders for example may favor a brokerage that has fixed spreads so the spreads don’t widen just around the times they need them to be tight. Your trading style should help you narrow down which brokerage to deposit with. Frequent re-quotes and slow servers may also be problematic for some depending on what their particular trading style is. 

3. Find out about regulation and reputation  
This is probably the most important point when picking a brokerage. In this day and age there is no reason to deposit with an unregulated brokerage considering the huge number of reputable regulated brokerages. This means when considering a brokerage you should first determine if their regulated by a proper regulator researching and discovering whether a regulator is genuine shouldn’t take more than a couple of minutes. Then you can search the relevant regulators site for any disciplinary action taken against the company, if you find such action this may be a good reason not to deposit with the said brokerage. After you have checked that the company is properly regulated and has a clean disciplinary record you should check and read about the reputation of the company. This should further narrow down your choice of brokerages. 

4. Check if they provide value for money in terms of spreads and commission  
Hopefully you have some idea of what instrument(s) you will trade the most. This will allow you to shop around for the best spreads. Getting the best value for money that you can is vitally important and can make a significant difference over the long run, a single pip greater spread may be a huge difference especially for those who scalp for a only a few pips profit from each trade. Some brokerages may offer very tight spreads but charge you commission at either a fixed quantity or typical a very small value of the trade say 0.1%. Brokerages that don’t charge commission tend to have wider spreads, however fixed commission can really eat into your profits if your positions are relatively small. So you should spend some time calculating which brokerage would offer the best value for money on the instrument(s) you trade and at the size which you intend to trade them at.  

5. Talk to the Brokerage and see what they say 
Talk to the brokerage through live chat, sign up for a demo account and wait for the marketing phone call. If a brokerage is too aggressive in their selling technique I generally see that as a bad sign. Again if a brokerage offers free learning, or tutoring, why not take them up on their offer and see if the information they provide is of any value or if it is merely a sales pitch. Getting a sense of how a brokerage regards and treats it’s clients can give you a good insight to what they will be like when you trade with them, I would personally say that things such as long winded sales pitches and hard selling are things which should put you off. 

These five broad categories are the main things you should take into consideration when picking a CFD brokerage to open up an account with.