CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. xx% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

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Trading guide

The basics of CFDs, leverage and risk — explained simply, before you put your money on the line.

Practise on demoGlossary

1. What is a CFD

A CFD (contract for difference) is an agreement between you and the broker on the price change of an underlying asset — a currency, an index, a share. You do not buy the asset: you gain or lose the difference between the opening and closing price.

You can open a position expecting a rise (long, buy) or a fall (short, sell). If the price moves the other way, the position loses money.

2. Leverage and margin

Leverage lets you open positions larger than the capital you commit. With 1:30 leverage, a 30,000-euro position needs 1,000 euros of margin.

Leverage amplifies everything: a 1% move is worth 300 euros, i.e. 30% of the margin committed. If losses eat too much of your margin, positions are closed automatically (for retail clients, at 50% of the required margin).

3. Order types

A market order opens the position immediately at the best available price. Pending orders wait for a price: Buy Limit and Sell Limit to enter at a better price than now, Buy Stop and Sell Stop to enter when the price breaks a level.

A stop loss closes the position if the loss reaches your chosen level; a take profit closes it at your target; a trailing stop moves the stop loss as the price moves in your favour.

4. Managing risk

Before opening a position, decide how much you are willing to lose. Many traders risk no more than a small percentage of their account on a single trade and size the position accordingly.

  • Always use a stop loss: in a fast market it may be filled at a worse price (slippage).
  • Do not use all the available leverage: keep free margin for adverse moves.
  • Check the economic calendar: data releases and central-bank decisions can cause price gaps.

5. Technical and fundamental analysis

Technical analysis studies price: trends, support and resistance, indicators such as moving averages, RSI and MACD — all available in MetaTrader 4. Fundamental analysis looks at the causes: interest rates, inflation, growth, company earnings.

Neither method predicts the future: they help you build a plan, not guarantee an outcome.

Mistakes to avoid

  • Opening positions that are too large for the account.
  • Moving the stop loss further away to 'give time' to a losing position.
  • Doubling up after a loss to win it back quickly.
  • Trading without a plan, on the back of news or emotions.

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