You do this of course by having a good CFD trading system that's profitable and has an acceptable drawdown. But what a lot of people don't know, is that having the right CFD trading platform is crucial to the success of your CFD trading as well!

Why? Because if you have a CFD platform that does what you want, you can 1. properly trade your system (and hence produce the results the system is supposed to produce!) and 2. maximize the profits from your CFD trading.

By the time you finish reading this article, you'll know why this is so, and also how to choose a CFD trading platform to maximise the success of your CFD trading.

Here's a checklist of 7 points you must look for in a CFD trading platform:

1. Are the CFDs that you want to trade available, and how many of them can be shorted?

If your CFD system trades the top 200 or 300 CFDs rather than say the top 30 or 100, to be fully profitable, then you'd need to ensure that the CFD platform provides a large enough number of CFDs. Also, look carefully at the number of CFDs that are shortable. If your system shorts the top 200 or so CFDs, then ensure that you can trade your system as it was designed, by checking the shortable list on their platform. In fact you may want to use a CFD platform's shortable list during your backtesting to ensure that your system can perform well on the provider's shortable list. So check this out, and if unsure, email them!

2. What are their commission costs?

For most CFD providers the one way commission is around 0.1 to 0.2% of the trade size, but for some providers, there is no commission. If they have commissions, check their minimum commission also. For example, a provider's commission may be 0.2% or $20 one way, whichever is greater.

3. What is their interest charge for long positions held overnight?

The interest charge for long positions held overnight is based on a major bank's overnight interest rate plus a few percentage points, so check what this is. As an example, for a $10 000 position held for 14 days, with a interest charge of 7.5% per annum, the cost for the entire trade is around $30. Note that for short positions, the interest is paid to you, so will offset the costs rather than contribute to it.

4. Do the CFD prices exactly mirror the underlying stock prices, or is the spread widened?

On many CFD trading platforms the spread is widened slightly by 0.05 to 0.1%. You should look at this in relation to the other costs though. Some platforms will widen the underlying stock spread by a 0.05% and have a commission of 0.1%, whereas another platform may not widen the spread but have a higher commission of 0.4%

5. Can you place limit orders on the platform to enter a CFD position in the evenings?

Many CFD platforms will enable you to place an order, such as a limit order, to enter a CFD position, at anytime of the day or night. This means that you can place a limit order in the evening, to enter a CFD when the market opens the next morning. This is important, as many people do their trading in the evenings because they work during the day.

6. Can you place “market orders” to enter a CFD position in the evenings?

Some CFD platforms will allow you to place a “market order” when the market is closed, and enter the CFD the next morning at the opening price, or the first traded price after the market opens. On some of these platforms, these are known as orders to “enter at open”. Again, this is important for those who need to place their orders all in the evenings.

7. How are your stop loss orders actually filled?

With CFDs you can place automatic stop losses, which is a great advantage of trading CFDs, but how are they filled? With many CFD trading platforms, as the underlying stock price falls through your stop loss, you'll be exited over a market weighted price if there's inadequate liquidity at any one price point. So you may experience some slippage at times. With other providers, you'll get out if the underlying stock simply trades at your stop price, which will reduce the possibility of slippage.

However, with other providers, the entire volume of your position has to trade at a single price point in order for you to exit. This means that you may get significant slippage or may not exit the trade at all that day.

With these providers, you'll need to check carefully each day, that the positions that you're supposed to be out of, has actually been exited. Although now, many platforms fill stop orders this way are providing more features to help you exit, such as specifying a price below a sell stop that you'd like to exit even if there's inadequate liquidity at one price point. So check carefully what the CFD platform rules are, when it comes to stops.

So there you have it.

You now have the 7 points that you must know, when choosing a CFD trading platform. They're essential to your ability to trade your CFD trading system as intended, to make the profits that your CFD system was designed to make!

There are 5 more keys to choosing a CFD trading platform, available from the website that's in the resource box at the bottom of this article.

So go there now to grab these 5 more keys on how to choose a CFD trading platform!

Kurt Magnussen makes it easy to go from CFD trading novice to learning the keys to successful CFD trading, quickly & easily. Learn the 5 other essential keys on how to choose a good CFD trading platform. To grab these tips, go now to this page on choosing a CFD trading platform as well as tips on CFD trading online.