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How to Trade CFDs

CFDs offer a way to diversify any portfolio. These steps explain how to trade CFDs with Equiti Global Markets and ensure best practice is followed.

Choose a Market to Go Short or Long

A CFD is simply an agreement between a buyer and seller to exchange the difference in opening and closing prices without owning the underlying asset. At Equiti these are offered across a wide range of markets and financial instruments, from commodities to currencies, indices, shares and more from across the world’s top financial markets.

One of the main advantages of trading CFDs is that you can either go long or short. If you think the market for your chosen financial instrument will increase in value then you will go long (buy), while if you think it will decrease you choose to go short (sell).

Enter Your Trade Size

Depending on the instrument you choose to trade, the value of one CFD unit will differ. One CFD is equal to one share for equity trades, but with forex, commodities, bonds and more this will vary. The minimum and maximum trade sizes are included in our pricing sheet for trading CFDs, to help you decide how little or large to make your CFD trades.

CFD trading is a leveraged product, so only a small percentage of the overall trade value (margin) is required. The margin requirements are displayed in our pricing sheet, alongside trading hours, average spreads and more.

Manage Risk

While leverage offers opportunities to make great profits from a lower initial deposit, the potential for losses is equal. An essential part of understanding how to trade CFDs is managing risk with the use of stop losses.

A stop loss will automatically close the trade when the market reaches a certain level to minimise losses. A limit order should be placed to close trades when a certain price higher than the market level is reached to lock in profit targets.

Review and Close CFD Trades

Once your CFD trades have been placed you can track its price fluctuations and progress in real time through the Equiti platform. Then either wait until a stop loss or limit order is hit or manually close any CFD trades by choosing the close position option. The net open profit and loss will be realised and immediately adjusted in your account balance.

Open an account with us to begin trading CFDs and take advantage of our powerful trading platform. For more information fill out the contact form below with your details.