The 1-2-3 basics to executing a CFD trade
Choose an asset
Decide which market you want to trade on. You can get trading inspiration using our fundamental and technical analysis research tools.
Decide to buy or sell
Click ‘Buy’ if you think the price will increase in value, or ‘Sell’ if you think the market will fall in value.
Select your trade size
Choose how many CFDs you want to trade.
Add a stop loss
A Stop Loss is an order to close your position out at a certain price if it moves too far against you.
Monitor and close your trade
Once you have placed your trade, you will see your profit/loss update in real time at the top of the screen. You can exit your trade by clicking the Close Trade button.
CFD trading explained
Choosing an Asset
When trading with NSXCOIN, you can choose CFDs on thousands of individual markets including shares, indices, currencies, commodities, interest rates and bonds, allowing you instant exposure to major global markets including the UK, US, Europe, Asia, Australia and New Zealand.
With such a vast choice, it is important to find a trading opportunity that suits you. You can use the research tools provided on the trading platform to help you identify trading opportunities that match your trading style.
Decide to buy (go long) or sell (go short)Once you have chosen a security, you need to know the current price. You can do this by locating the asset on the trading screen.CFD markets have two prices. The first price quoted, is the Sell price (the bid), and the second price is the Buy price (the offer). The difference between the two is known as the spread. The price of your CFD is based on the price of the underlying instrument.If you believe a market price will go up, you Buy that market (known as going long). If you believe it will fall, you Sell the market (going short).
Select your trade size
With CFD trading, you select the number of CFDs you wish to trade. With equity trades, 1 CFD is equivalent to 1 share. When trading indices, FX, commodities, bonds or interest rates, the value of 1 CFD varies depending on the instrument. You can see which number you are trading on by looking up the ‘tick value’ in the instrument’s market information sheets. CFDs are traded in the base currency of the market.
CFD trading is a leveraged product which means you only need to have a small percentage of the overall trade value, known as margin, in your account in order to open the trade. Generally speaking, the larger the value of your trade, the more margin is required. It is important that you have sufficient funds in the account to place the trade. The margin calculator in the trading platform will automatically calculate the initial margin for you.
A Limit order (Take Profit) is an instruction to close out a trade at a price that is better than the current market level and it is used to help lock in profit targets.
Standard Stop Losses and Limit orders are free to place and can be placed in the dealing ticket when you first place your trade, or once your trade is open.
Monitor your trade
Having placed your trade and any Stop or Limit orders, your profit and loss of your CFD trade will now fluctuate with each move in the market price. You can track asset prices, see your profit/loss update in real-time and add new trades or close existing trades from your computer, or by using our trading app on your smartphone or tablet.
Closing your trade
Once you are ready to close your trade, you need to do an opposite trade to the opening trade, or simply select the ‘Close Position’ option within the positions window. If you bought an asset, you now need to sell that asset and if you went short, you now need to buy that asset. Remember to monitor the buy and sell prices offered on the platform; because of the spread, the prices are the difference between the buy and sell prices.
By closing the trade, your net open profit and loss will be realized and immediately reflected in your account’s cash balance. This will be done automatically for you if your Stop Loss or Limit order has been triggered.
Add stop and limit orders
Before you place your trade, it’s important to consider your risk management strategy. A key risk management technique is to place an order, such as a Stop Loss that will automatically close the trade if the market reaches a certain level.
A Stop Loss order is an instruction that allows the platform to close your open position once it reaches a specific level set by you. This will, as the name suggests, be at a price below the current market level and will be triggered on losing trades to help minimize losses.
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