CFD Trading Strategies
Effective use of CFD trading strategies can make or break a trader’s profits. Speculating with no strategy leaves you vulnerable to losing all your capital quickly. This guide will explain what a CFD strategy is and how one works, before running through some of the best strategies and tips for traders at every level of their learning journey.
Best CFD Trading Brokers
Here is a summary of why we recommend these brokers in May 2025:
- Interactive Brokers - Over 8,000 CFDs are offered on a vast array of instruments, encompassing stocks, indices, forex, and commodities. Moreover, the TWS platform lends itself to seasoned day traders, offering a comprehensive selection of over 100 order types and algorithms, alongside premium market data sourced from reputable sources such as Reuters and Dow Jones.
- UnitedPips - UnitedPips supports CFD trading on a narrow selection of currencies, metals and cryptos. It somewhat compensates for the meagre asset range with high leverage up to 1:1000, seriously amplifying potential profits or losses, and spreads that don’t change with market conditions.
- RedMars - RedMars caters to various short-term trading styles across popular asset classes, including 7 commodities, 14 indices, and 120+ stocks. Leverage is available up to 1:30 (retail) and 1:500 (pro), amplifying results. However, there is no calculator to help with understanding margin requirements and the depth of investments is limited.
- IQCent - CFDs are available on forex, indices, commodities and cryptos, although the range of 100+ instruments is limited compared to alternatives such as Quotex with 400+. Leverage is available up to 1:500 but the $250 minimum deposit is noticeably higher than competitors.
- Dukascopy - Dukascopy offers highly leveraged CFD trading up to 1:200. A wide selection of asset classes are available, including currencies, equities, commodities, ETFs and cryptos. Spreads are tight starting from 0.1 pips and traders get 24/7 support that performed well during testing. However, the real standout is the security provided by trading CFDs through a multi-regulated broker and Swiss bank
- Capitalcore - The range of CFDs at Capitalcore is narrow, with 6 precious metals, 6 indices, and a slim suite of stocks. Notably, there are no commodities such as oil or gas and spreads vary greatly. Tiered leverage is available depending on the account, from 1:100 to 1:2000.
CFD Trading Strategies Comparison
| Broker | CFD Leverage | Minimum Deposit | Minimum Trade | Regulators |
|---|---|---|---|---|
| Interactive Brokers | 1:50 | $0 | $100 | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| UnitedPips | 1:1000 | $10 | 0.01 Lots | IFSA |
| RedMars | 1:30 (Retail), 1:500 (Pro) | €250 | 0.01 Lots | CySEC, AFM |
| IQCent | 1:500 | $250 | $0.01 | IFMRRC |
| Dukascopy | 1:200 | $100 | 0.01 Lots | FINMA, JFSA, FCMC |
| Capitalcore | 1:2000 | $10 | 0.01 Lots | IFSA |
Interactive Brokers
"Interactive Brokers is one of the best brokers for advanced day traders, providing powerful charting platforms, real-time data, and customizable layouts, notably through the new IBKR Desktop application. Its superb pricing and advanced order options also make it highly attractive for day traders, while its diverse range of equities is still among the best in the industry."
Christian Harris, Reviewer
Interactive Brokers Quick Facts
| FTSE Spread | 0.005% (£1 Min) |
|---|---|
| GBPUSD Spread | 0.08-0.20 bps x trade value |
| Stocks Spread | 0.003 |
| Leverage | 1:50 |
| Regulator | FCA, SEC, FINRA, CFTC, CBI, CIRO, SFC, MAS, MNB, FINMA, AFM |
| Platforms | Trader Workstation (TWS), IBKR Desktop, GlobalTrader, Mobile, Client Portal, AlgoTrader, OmniTrader, TradingView, eSignal, TradingCentral, ProRealTime, Quantower |
| Account Currencies | USD, EUR, GBP, CAD, AUD, INR, JPY, SEK, NOK, DKK, CHF, AED, HUF |
Pros
- There's a vast library of free or paid third-party research subscriptions catering to all types of traders, plus you can enjoy commission reimbursements from IBKR if you subscribe to Toggle AI.
- While primarily geared towards experienced traders, IBKR has made moves to broaden its appeal in recent years, reducing its minimum deposit from $10,000 to $0.
- The TWS platform has clearly been built for intermediate and advanced traders and comes with over 100 order types and a reliable real-time market data feed that rarely goes offline.
Cons
- TWS’s learning curve is steep, and beginners may find it challenging to navigate the platform and understand all the features. Plus500's web platform is much better suited to new traders.
- IBKR provides a wide range of research tools, but their distribution across trading platforms and the web-based 'Account Management' page lacks consistency, leading to a confusing user experience.
- Support can be slow and frustrating based on tests, so you might find it challenging to reach customer service representatives promptly or encounter delays in resolving issues.
UnitedPips
"UnitedPips is ideal for traders seeking leveraged trading opportunities, the security of fixed spreads, and the flexibility to deposit, withdraw, and trade cryptocurrencies - all in one sleek TradingView-powered platform."
UnitedPips Quick Facts
| Bonus Offer | 40% Deposit Bonus |
|---|---|
| FTSE Spread | NA |
| GBPUSD Spread | 1.3 |
| Stocks Spread | NA |
| Leverage | 1:1000 |
| Regulator | IFSA |
| Platforms | UniTrader |
| Account Currencies | USD |
Pros
- UnitedPips offers impressive leverage up to 1:1000 with zero swap fees or commissions, which can enhance potential returns for day traders and swing traders looking to control prominent positions with less capital.
- Although being handed off mid-chat due to shift changes during testing was frustrating, customer support is generally good with quick, helpful responses, and 24/7 support via phone and email for regional teams is a definite advantage.
- UnitedPips’ platform performs well, with an intuitive design that will appeal to beginners, while the TradingView integration delivers powerful charting tools without overwhelming users, making it straightforward to execute trades efficiently.
Cons
- Unlike brokers such as IG, UnitedPips is an offshore broker not regulated by any 'green tier' financial authorities, raising concerns for traders seeking assurance and protection under well-established regulatory frameworks.
- UnitedPips lacks comprehensive research, while the educational content for beginner traders is woeful. Compared to brokers like eToro, which offers tutorials, webinars, and advanced courses, UnitedPips offers minimal resources to help new traders understand key concepts.
- UnitedPips' selection of tradable instruments is still minimal, comprising a bare minimum selection of forex, metals and crypto. There are no equities, indices or ETFs, which may be a drawback for experienced traders looking for diverse opportunities.
RedMars
"RedMars is the best fit for experienced day traders familiar with the MetaTrader 5 platform and based in the EU, where the broker is authorized by the CySEC. However, the threadbare education and research tools make it unsuitable for beginners."
RedMars Quick Facts
| FTSE Spread | 15 |
|---|---|
| GBPUSD Spread | 0.7 |
| Stocks Spread | Variable |
| Leverage | 1:30 (Retail), 1:500 (Pro) |
| Regulator | CySEC, AFM |
| Platforms | MT5 |
| Account Currencies | USD, EUR |
Pros
- The broker supports a range of flexible payment methods, including wire transfers, credit cards, e-wallets, and notably cryptocurrencies
- RedMars offers one of the best platforms for day trading, MT5, hosting 21 timeframes, dozens of analytical tools, flexible templates and algo trading
- Clients in the EU, in particular, can trade with peace of mind knowing RedMars is authorized by the CySEC with up to €20K compensation available through the ICF in the event of bankruptcy
Cons
- The no-frills trading environment offers little beyond the basics, with no Islamic account, PAMM account or copy trading.
- While RedMars' spreads are within industry averages, they don't offer a significant edge over the cheapest day trading brokers we've personally used, notably IC Markets
- With just 300 instruments, RedMars offers a narrow trading environment, particularly compared to category leaders like BlackBull Markets which offers 26,000 assets
IQCent
"IQCent will appeal to day traders looking for a straightforward binary options and CFD trading platform with low fees, a range of accounts, and copy trading. Getting started takes less than 1 minute and a $250 deposit. "
IQCent Quick Facts
| Bonus Offer | 20% to 200% Deposit Bonus |
|---|---|
| FTSE Spread | 1.4 |
| GBPUSD Spread | 0.8 |
| Stocks Spread | N/A |
| Leverage | 1:500 |
| Regulator | IFMRRC |
| Platforms | Online Platform, TradingView |
| Account Currencies | USD, EUR |
Pros
- The broker offers up to 98% payouts on binary options, which is more than alternatives like Pocket Option, only offering up to 92%
- CFD trading fees are competitive based on tests, including 0.7 pips on major forex pairs such as EUR/USD
- The proprietary terminal offers TradingView-powered charts which deliver dozens of technical indicators and studies
Cons
- The market analysis is very basic with limited technical summaries and insights from analysts
- There's no automated trading support for algo traders
- The broker is not overseen by a respected regulator, though this is common among binary options firms
Dukascopy
"If you’re an experienced trader, Dukascopy provides the tools you need: JForex for algorithmic strategies, competitive spreads from 0.1 pips, leverage up to 1:200, and the peace of mind of using a Swiss-regulated bank and broker."
Dukascopy Quick Facts
| Bonus Offer | 10% Equity Bonus |
|---|---|
| FTSE Spread | 100 |
| GBPUSD Spread | 0.1 |
| Stocks Spread | 0.1 |
| Leverage | 1:200 |
| Regulator | FINMA, JFSA, FCMC |
| Platforms | JForex, MT4, MT5 |
| Account Currencies | USD, EUR, GBP, CAD, AUD, NZD, JPY, ZAR, TRY, SEK, NOK, DKK, CHF, HKD, SGD, PLN, CZK, AED, SAR, HUF, MXN |
Pros
- The proprietary JForex platform is highly advanced, offering tools for algorithmic trading, extensive charting, and access to deep liquidity for short-term traders.
- Dukascopy features some of the best research we’ve seen, even a professional TV studio in Geneva covering financial news, market analysis, and daily insights from professionals.
- Dukascopy offers tight spreads starting from 0.1 pips, leverage up to 1:200 (depending on the jurisdiction), and volume-based commissions that reward high-frequency traders.
Cons
- Some account types, such as the MT4/MT5 accounts, require a higher minimum deposit of $1,000, which may not be ideal for traders with smaller budgets.
- While Dukascopy provides some educational resources and 24/7 support, the complexity of its platforms and tools required extensive testing and may overwhelm newer traders.
- While JForex is feature-rich, it has a steep learning curve, making it less suitable for beginner traders who might prefer simpler platforms.
Capitalcore
"The major selling points of Capitalcore are its high leverage options up to 1:2000 and zero commission or swap fees. However, its weak regulatory oversight from the IFSA and non-existent education place it far behind the top brokers."
Capitalcore Quick Facts
| Bonus Offer | 40% Deposit Bonus up to $2,500 |
|---|---|
| FTSE Spread | 25 |
| GBPUSD Spread | 0.5 |
| Stocks Spread | 1.5 (Apple) |
| Leverage | 1:2000 |
| Regulator | IFSA |
| Platforms | WebTrader, Pro |
| Account Currencies | USD |
Pros
- Unlike most brokers, Capitalcore offers an unlimited demo account that takes under 5 minutes to open.
- While a relative newcomer to binary options space, its transparent, accessible service earned it runner up in DayTrading.com's 2025 'Best Binary Broker' award.
- Capitalcore has added binary options trading on 30+ currency pairs, metals and crypto with one-click trading and payouts up to 95%.
Cons
- The web platform was inconsistent during testing, with occasional technical glitches that meant the trading platform wouldn’t load.
- Capitalcore’s threadbare education and research seriously trail category leaders like IG, making it less suitable for aspiring traders.
- Capitalcore is not regulated by major financial authorities and has an unproven reputation, raising concerns about the safety of client funds.
What Is A CFD Trading Strategy?
Firstly, a CFD is a contract-for-difference, a financial derivative product that allows investors to speculate on the price movement of assets from a range of markets, including forex, commodities, indices and shares, without owning the underlying asset.
This means that you can easily take a position on rising and falling markets. CFDs are a leveraged product, which allows you to put down a small amount of money, known as a margin, and trade with a larger sum.
CFD trading strategies are essentially game plans. You can think of it as the instructions that the manager of your team would give out before a big match.
Strategies are designed to play to your trading strengths, as well as those of the market itself.
How CFD Trading Strategies Work
CFD trading strategies work by establishing a set of rules and procedures that you, the investor, must follow while trading. Some strategies can have loosely designed rules, while others are stricter.
Let’s take some CFD trading strategy examples. Rangebound (range) trading has a very defined set of rules that act mechanically, meaning they can even be programmed to run automatically.
With range trading, there are two rules to set for any CFD. When the value hits X, buy, and when the value hits Y, sell. This is one of the most straightforward trading strategies.
Another example is dividend CFD trading strategies. CFDs, like traditional shares, have the added benefit of dividend income. This is calculated at the close of trade the day before the stock’s ex-dividend date.
One strategy to use here is to go long on the shares on the day before they go ex-dividend and sell the contracts immediately afterwards.
Provided the price does not drop by the entire dividend amount, the investor stands to gain from this.
Top 5 CFD Trading Strategies
Here, we will run through some of the best and most popular CFD trading strategies and tips.
News Trading
One of the most popular CFD trading strategies, following the news involves simply following a comprehensive economic and financial calendar. This will keep you aware of upcoming events that could impact the value of the underlying asset.
This approach splits into two main CFD trading strategies, either investing before a statistics release or just after. The first option aims to try to understand and predict the reactions to the release.
This is the riskier of the two approaches as it can be difficult to know how the market will respond, though investors stand to make a larger profit this way.
The second option is to go with the flow and trade after the statistic or news release. This way, you can see initially which way the market moves in reaction to the release and follow it.
There are still risks with this method as prices can rapidly change direction, therefore it is important to implement stop loss and take profit orders when trading to protect your capital.
Technical Analysis Trading
Using technical analysis is the foundation of many CFD trading strategies, each with its own combination of indicators and graphical tools.
The approach involves studying available historical data and charts to make analytical predictions. The key here is to make a note of all past trends.
If you are a day trader, look at the daily and intra-day charts. If you are going to hold for longer, study 3-month to year-long charts instead.
Setting up useful indicators can be a massive help with technical analysis CFD trading strategies. Investors can set support levels that are equal to established lows and resistance levels that are equal to established highs.
Trends
Trend lines are another simple and easy indicator to use. These involve drawing a straight line between two points on your chart.
To show an increasing trend, draw a line between two lows and to show a decreasing trend, draw a line between two peaks. Once a trend line has been touched three times, it has been validated.
Another indicator to help your technical analysis CFD trading strategies is the oscillator. Oscillators indicate overbought or oversold conditions in markets. They show whether the asset has either risen or fallen too far and that a change is imminent.
Using all these indicators combined with the study of historical data is one of the most popular CFD trading strategies.
Pair Trading
Pair trading is one of the more popular CFD trading strategies for stocks, although it can also be used with currencies and commodities.
This strategy can be used with both high or low market volatility and the direction of movement is not important.
Pair trading involves investing in two CFDs that are within the same industry, one with a long position and one with a short.
Correlation is essential, measuring the relationship between the price movements of the two assets. The two assets need to be those that are usually highly correlated but have started to become less correlated.
With pair-focused CFD trading strategies, investors take advantage of the divergence of the asset’s values. The first thing is to decide which is the weaker asset and which is stronger.
Then, open a short position on the stronger asset and go long on the weaker asset. The direction of the market does not matter, as you will be winning with one position and losing with the other.
Profit is based on the relative movement of the assets, so the more they diverge, the more you win.
Hedging
Hedging is slightly different from other CFD trading strategies, it is more like a form of insurance.
This strategy works best when you already have a diverse portfolio of stocks or CFDs that you are holding for the long term. Investors often use hedging to protect against short term drops in value.
Let’s say an investor owns Pfizer stocks. They believe that the sector is weakening and the value of the stocks is going to fall. They do not want to sell their Pfizer stocks to protect against this, as they believe in them for the longer term.
Instead, the investor opens a short position on a CFD for Pfizer stocks. This way, you will benefit from the short-term decrease in the stock value without losing the asset.
Hedging is often used in conjunction with other, primary CFD trading strategies.
Check your broker allows hedging prior to trading.
Swing Trading
The CFD swing trading strategy is all about finding markets that are trending. Focus on markets that are trending in a specific direction. This allows investors to find assets that have the potential to move by large amounts in a short space of time.
These CFD trading strategies combine well with technical analysis. The indicators described earlier can be used to indicate strong trends.
Additionally, resistance levels can show the right time to get out of a trade and take your profit. Oscillators could indicate the peak has been reached and that the trend is about to reverse, allowing you to get ahead of the game.
CFD Trading Strategies For Specific Assets
Oil
CFD trading strategies for oil are numerous but a relatively simple one is a combination of the RSI and CCI indicators. The former will help suggest when an asset is overbought or oversold, while the latter aims to find cyclical trends.
One approach with these is to wait until the RSI demonstrates an overbought condition for a prolonged period, indicating a bullish market.
The next step is slightly counterintuitive and involves waiting for a reset, where the RSI drops down and shows an oversold condition.
To confirm the bullish sentiment, though, ensure that the CCI indicator remains above zero, preferably above 100. When this all comes together, go long on the CFD.
As with all robust CFD trading strategies, you need to place protective measures, in this case in the form of stop losses.
Check the asset value at the last time it was shown to be oversold and place a stop loss here. You should exit the position either at the end of the day or if the CCI drops below zero, demonstrating a new cycle.
Indices
Popular among indices CFD trading strategies is momentum trading, which involves identifying a trend and jumping on the bandwagon. Indices are great for this strategy as it lends itself best to liquid assets, those with a high trading volume.
Momentum trading can be similar to news trading the latter is a great way to inform the beginning of a trend for the former. When a major news announcement is released, it can cause short-term volatility and a persisting longer-term trend, which momentum traders would identify and follow.
Gold
With gold CFD trading strategies, historical data is key. Gold value follows a strong yearly trend, the price tends to rally in January, February, August, September, November and December. Therefore, it is often best to purchase gold CFDs during these periods.
If the price of gold is trading at support in January (the previous low), go long. If the price has rallied, wait until it breaks above resistance to go long. Following this, place stop-loss orders just below the last low swing. Now, hold until the end of February or until you are ready to take your profit. Move the stop-loss up to the most recent low each time.
Stocks
Almost any CFD trading strategies can be applied to stocks. If you hold a diverse portfolio, hedging could benefit you the most. Otherwise, pair trading might be an effective way to trade with less risk, as the direction of movement is not important. Check out our trading strategies page for more.
Final Word On CFD Trading Strategies
CFD trading strategies are the foundation of a successful day trader, all the self-proclaimed forex and CFD millionaires will have strict ones they follow. A good strategy will not only provide good predictions for entering positions, but it will also carefully manage the position’s risk and inform trailing stop or exit positions.
FAQs
What Is A CFD?
A CFD is a contract-for-difference. It is a derivative product that allows you to speculate on the price movement of an asset without having to own the underlying asset.
What Are The Top CFD Trading Strategies For Beginners?
There is no clear answer to this question, each strategy depends on the trader and asset being speculated upon. However, it is often best to start with those that are easier to understand and pick up, like news trading or swing trading.
Do You Own The Underlying Asset When Buying CFDs?
No, you do not. With CFDs, you only speculate on the price movement of an asset and earn profit based on this.
What Are The Best CFD Trading Strategies?
There is no simple answer to this. Each strategy has different benefits and suits different styles and assets, read through them all to figure out which is best for you and trial a few out using demo accounts.
Where Can I Learn More About CFD Trading Strategies?
There are CFD trading strategies books available to help you learn further information about strategies. Equally, the internet is filled with PDFs, videos and more to teach you. We also have a dedicated strategies page for more information on other approaches not specific to CFDs.