Contracts for difference (CFDs) are derivative agreements that let traders speculate on financial and commodity markets without taking an ownership interest in the underlying asset. CFDs can be traded on various underlying assets, including forex currency pairs, indices, stocks and commodities. Having the right software has become one of the key elements of successful trading in the modern era. Those interested in trading CFDs are no exception to this general rule. You can now use CFD software programs to easily trade in and analyze multiple markets using a single online trading account. In this article, Benzinga lists and reviews the best CFD software programs so you can quickly get started trading CFDs.
Please note: CFD Trading is banned in the US.
The Best CFD Software Programs
Benzinga’s list of the top CFD trading, market analysis and calculator software appears below.
1. MetaQuotes’ MetaTrader 4 and 5 Trading Platforms
Developed by MetaQuotes, MetaTrader 4 and MetaTrader 5 are the primary CFD trading software programs used by the majority of retail online traders, whether they are novices or very experienced. The software is available for Windows, Linux and macOS users.
The popular trading platforms are free to download and use, and they support trading in multiple assets, including CFDs on a wide variety of underlying assets, forex currency pairs, stocks and futures contracts.
The MetaTrader platforms offer extensive technical analysis functionality, with many popular technical indicators and a wide range of time frames. The interface also lets you view multiple charts and asset quotes, as well as a news feed and economic calendar for fundamental analysts.
Trading from charts is also supported by the software. You can use it to enter market, limit, stop loss and trailing stop orders in an easy and intuitive manner.
Additional features of this trading software include support for algorithmic trading using its proprietary MQL4 and MQL5 programming languages that let you code your own trading algorithm or pay someone else to do it for you.
You can also access a wide variety of off-the-shelf trading algorithms or trading robots created by the broad community of MetaTrader users to run on this versatile platform. Copy trading is also supported.
If you need to backtest a trading strategy to see how it might have performed and to make necessary tweaks to improve its performance, then the MetaTrader platforms also offer that helpful feature. In addition, you can use the software to engage in practice trading in a demo account before operating in a funded live account. You can run the software on a virtual server for more reliable uptime and faster execution times.
Since most online brokers support one or both of the MetaTrader platforms, you should have no trouble finding a CFD trading outlet where you can use this understandably popular trading and market analysis software.
- MT4 and MT5 are by far the most popular trading platforms out there
- These platforms are easier to understand than you might believe
- You may prefer a broker’s proprietary platform
2. NinjaTrader’s Advanced Trading Platform
If you are an advanced trader who wants to trade futures and options as well as CFDs, then the Advanced Trading Platform offered by NinjaTrader may well meet your needs. This software is designed for use on Windows-based computers, but it can also operate on Mac computers within an appropriate Windows simulator like Apple Boot Camp.
This multi-asset trading and analysis software offers powerful market analysis tools and boasts thousands of third-party trading apps you can use to enhance your trading experience. The basic version of the software is free to download and use for charting, backtesting and demo trading.
If you fund a brokerage account with NinjaTrader, however, then you get to use the software without paying its usual platform fees. Those who want to get access to the CFD software’s more advanced features will either need to lease the software on a quarterly basis or buy a lifetime license that includes free upgrades.
For more information about the Advanced Trading Platform and how NinjaTrader measures up as an online broker for trading futures, CFDs and other assets, be sure to check out Benzinga’s review here.
- This company designed its own trading platform to make life easier for traders
- NinjaTrader offers many more asset offerings and trading options
- You might prefer MT4 or MT5
3. Historical Volatility Calculator
Historical volatility tells a CFD trader roughly how risky a particular underlying asset has been to trade over a past time frame, so many traders use it in their trading plans to size positions appropriately.
A historical volatility calculator is a type of software that takes an underlying asset’s historical price or exchange rate data and computes the historical volatility the asset has seen over a chosen time frame.
Some trading platforms offer historical volatility calculations as a technical indicator, but you can also use free calculators like this one shown below if you have a spreadsheet of price or exchange rate data.
- Learning market history informs all your investments
- You can learn to catch trends before it is too late
- Historical trends can be broken at any time
4. Stock Research, Screening and Analysis Software
If you plan on trading CFDs on stocks or doing CFD investing, then you should have access to online software that provides a decent stock research, screening and analysis service so that you can make better decisions about which stock CFDs to buy or sell.
Online stockbrokers like E*TRADE and Charles Schwab offer such a service to funded account holders free of charge, although they do not offer a CFD execution service. Read more about Benzinga’s take on these and other stock trading software providers here.
In order to augment what you might ordinarily get access to at a typical online CFD broker that allows you to trade CFDs on stocks, stock research and analysis software from a high-quality stockbroker should include historical and real-time stock price data, helpful stock comparison metrics like earnings per share (EPS), the price/earnings ratio (P/E ratio), dividend payment information, breaking and searchable company news and a stock screener.
Advantages of Using CFD Software
CFD trading and analysis software is designed to make your experience as a CFD trader easier and more successful, so it has plenty of advantages.
Enables you to trade CFDs online: If you want to trade CFDs online, as most retail CFD traders do these days, then you will need CFD trading platform software supported by your broker.
Enables algorithmic trading: If you want to use a trading algorithm or robot to scan the CFD markets or trade automatically for you, then supportive CFD trading software is virtually essential.
Assists in market analysis: Since technical and fundamental market analysis is typically considered necessary for successful trading, using CFD market analysis software or a CFD trading platform that offers market analysis features can boost your performance considerably as a CFD trader.
Watch more markets: You can watch more CFD markets using scanning software, which means more profitable trading opportunities might present themselves.
Boosts opportunities: Since you can use CFD software to trade virtually any time or anywhere, you can access more trading opportunities, which should translate into increased CFD trading profits if you have developed a winning trading strategy.
Speeds up computations: A major plus of using CFD software is that it can often perform tedious and time-consuming calculations, scans and searches quickly. Since fast analysis and trade planning calculations typically make for more profitable trading, this time-saving software can both make and save you money when trading CFDs.
Drawbacks of Using CFD Software
While most people will find some forms of CFD software virtually essential to engage in CFD trading, some drawbacks do exist.
Can be difficult for the technologically challenged: If you are uncomfortable with using modern technology, such as computers, software and smartphones, then you might not find CFD software easy to pick up and use. You may need to find a tutor to help you get more comfortable using the software and its hardware platform.
Hacking risk: Whenever online access to your trading account exists, so does the risk of being hacked. Fortunately, most reputable online CFD brokers are well aware of this fact, so they take substantial security precautions for those who use their supported CFD trading software.
Who Benefits Most From Using CFD Software?
If you plan on trading CFDs and fall into one of the following categories, then CFD software could definitely make sense for you.
Online Traders: If you want to trade CFDs online, then you will need CFD trading platform software.
Retail Traders: Thanks to CFD trading platforms, retail traders can now access and trade markets that they could not previously afford to operate in.
Copy Traders: If you are looking to copy the transactions of another CFD trader in your own account, then you will generally need CFD trading software.
Algorithmic Traders: Those who want to create or buy and use CFD trading robots will usually need to use CFD software that supports algorithmic trading like the MetaTrader platforms.
Analytical Traders: If you plan on doing a substantial amount of technical or fundamental analysis to support your trading strategy, then you will typically benefit from CFD software that offers the helpful features you need. These can include technical indicators, charting and trading from charts for technical analysts, market scanners and a news feed and economic calendar for fundamental analysts.
Frequently Asked Questions
On which software is CFD trading done?
Retail traders will generally use trading platform software supported by their online broker to trade CFDs. Since many online brokers support the popular MetaTrader 4 and 5 trading platforms, traders who might want to change brokers will typically use that software platform for CFD trading.
Which is better, MetaTrader or NinjaTrader?
The MetaTrader 4 and 5 platforms are free to download and use; they have a wide user community; and many brokers support one or both of them. A basic version of NinjaTrader can also be used in a similar manner free of charge for demo account trading, and it has some apps and advanced features that certain traders might find appealing if you’re willing to pay to use them. Still, the NinjaTrader platform has considerably less support among online brokers and the retail trading community in general. Overall, that makes MetaTrader better for most users.
Is CFD trading legal in the U.S.?
No, CFD trading is not legal in the U.S.