LONDON, August 1, 2012 /PRNewswire/ --
Learn to trade on major indices, such as the FTSE 100, with our CFD trading guide.
Designed for those trading with a City Index CFD trading account, we look at what a CFD is, markets available to trade, placing a trade through the trading platform and managing your risk with the aim of limiting potential losses.
Introduction to CFD Trading
Trading CFDs [Contracts for Difference] is an alternative to traditional forms of trading as you do not own the underlying instrument.
Instead, you take a position on the future price movement of your chosen market through an agreement between two parties to exchange the difference between the opening and closing price of a contract.
Trade over 10,000 Markets
With a CFD trading account from City Index, you can take a position on over 10,000 global financial markets, including:
Access and trade major indices through the CFD trading platform, such as:
- UK 100
- Wall Street
- Germany 30
- France 40
How to Trade the FTSE 100
Through your CFD trading account you can take a position on the FTSE 100 - presented as the UK 100 within the trading platform.
In the event you expect the FTSE 100 to fall - you can go short and sell the UK 100. Alternatively, if you expect the FTSE 100 to rise - you can go long and buy the UK 100.
If the market moves in favour of your position, you will net a profit*. However, if the market moves against your position, you will incur a loss. With this in mind, it is imperative that you manage your risk using the various tools available whilst fully researching your chosen market.
Managing you Risk
Before placing a trade, it is important to research your chosen market.
Keeping up-to-date with the latest financial news surrounding your market and those affecting its share price is imperative to limiting your risk when trading. Being prepared for every eventuality could be the difference between a profitable trade and a losing one.
Through the CFD trading platform, you can also utilise risk management tools such as Stop Loss Orders.
A Stop Loss Order will automatically close out your losing trade at a predetermined point set by you, with the aim of limiting your losses.
Start Trading CFDs Online
It's easy to start trading CFDs online. Simply apply for an account today and soon you could be taking a position on popular markets such as indices, shares, currencies and many, many more.
Access Free CFD Trading Articles
*CFD trading is exempt from Stamp Duty in the UK. However, tax laws are subject to change. Seek independent advice if necessary.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread betting.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.
CFD trading is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
SOURCE City Index