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How to start and get into trading: A

complete guide
Ever wanted to start trading, but simply didn’t know where to begin?
We’ve put together a guide on how to get started. Learn how to get
into trading with us, an award-winning provider.1

Discover trading

Practise on a demo

Contact us: +44 (20) 7633 5430

GROUP ESTABLISHED 1974, 313,000+ CLIENTS 17,000+

FTSE250 LISTED WORLDWIDE MARKETS
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 8 steps to start trading
1 Understand how trading works

2 See examples of trades

3 Research the available markets

4 Know the risks of trading and how to manage them

5 Learn more about trading styles and strategies

6 Create a trading plan

7 Begin trading on a practice account

8 Get into trading by opening your live account

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 1 Understand how trading works

Trading is the buying and selling of an asset of your choice – be it indices, shares, forex or
commodities – without owning the underlying instrument. With us, you’d trade using
contracts for difference (CFDs), a derivative that enables you to speculate on the price
movements of an underlying without owning it.

You can either go long (buy) or short (sell):

You’d go long if you think that the underlying’s price will rise

You’d go short if you think that the underlying’s price will drop

If your prediction is correct, you’d make a profit; contrarily, if it’s incorrect, you’d incur a
loss.

Discover the basics of trading for beginners

How to start trading

You’d trade using CFDs with us - you’d buy or sell contracts to exchange the price
difference of a financial instrument between the open and close position. Whether you
make a profit or loss will depend on the outcome of your prediction.

CFDs are leveraged derivatives – they enable you to get full exposure to the value of the
underlying asset at a fraction of the cost, by using a deposit called margin. Leverage will
result in magnified profit or loss, it’s important to ensure you manage your risk carefully.

Learn more about trading CFDs

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 Leverage and margin 101
Leverage is a tool used when trading derivatives like CFDs. It enables you to open a
position using margin (a deposit) while still getting full exposure to an underlying asset.
This means you’re paying an initial deposit, that’s a fraction of the full value of your trade,
with your provider loaning you the rest.

For example, at a margin requirement of 20%, you’d need to deposit $200 to open a
shares position worth $1000. In the case of indices, a 5% margin would require a $50 to
open a position at $1000. And for forex, a 3% margin requirement would need you to
deposit $30 to open a position worth $1000.

Trading on margin comes with risk, because the position is still based on full exposure.
This means you can gain or lose money quickly, which is why you should set stop orders
on all positions to ensure you don’t lose more money than you’re comfortable with.

If you don’t set stops, you could be placed on margin call and your positions might be
closed out automatically. However, note that our margin policy doesn’t guarantee against
your capital running into a negative balance, depending on region and account type
(retail or professional).

The margin call will be triggered when your equity drops below 50% of your initial
deposit requirement. We’ll do our best to contact you, although not an obligation, when
your equity drops beneath 99%, 75% and 55% of margin, respectively. However, it’s your
responsibility to ensure your account has sufficient funds.

To avoid having your positions closed, transfer enough funds into your account to
increase your equity above the margin requirement, or close some positions to reduce it.

Read more about risk management

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 You can trade rising and falling prices
When trading, you can speculate on rising or falling asset prices. You’ll buy (go long) if
you think the asset’s price will rise, or sell (go short) if you think it’ll fall. So, if you go long
and the price rises, you’ll make a profit – but if it falls, you’ll make a loss. The opposite is
true when you open a short position.

What is the bid-ask spread?

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 What is the bid-ask spread?
A spread is the difference between the bid (sell) and ask (buy) price that’s quoted for an
asset. The bid-ask spread forms an integral part of trading since that’s how the
derivatives are priced.

By applying a spread, the asset’s buying price will be a bit higher than the underlying
market price and the selling price a bit lower.

Why a top trading platform is important

Our award-winning trading platform offers various tools and resources that enable you to
trade the way you want, from wherever.1
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 It provides access to price charts, which you can use to track the performance of
numerous asset classes across more than 13,000 CFD financial markets worldwide. Our
platform also offers technical indicators and a Reuters news feed – plus, you can use IG
Academy, expert webinars and seminars, and more to learn about trading or to build on
your skills.

Check out IG Academy

2 Trading example
Below is an example to help you understand how trading works:

CFD trading on commodities example

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 If your trading prediction is correct

Let’s say, after doing some research on commodities, you believe the spot gold price will
increase from its current level of $1,809.75.

You decide to take a long position, buying five Spot Gold Mini (10oz) CFDs, each with a
contract size of $10 per point of movement, making it a total of $50 per point (5 CFDs x
$10). The current buy price is $1,810, which is a little higher than the underlying market
price because of the spread.

The margin factor of spot gold CFDs is 5%, which means to open a position worth
$90,500 you’d require a margin deposit of $4,525 ($50 x $1810 x 5%).

If there’s a rise in the spot gold price that increases its value to $1,820.25 and you decide
to close your position at $1,820, you’d make gains of $500 (10 points x $50) as the market
would’ve moved in your favour by 10 points (excluding any additional costs).

If your prediction is incorrect

On the other hand, if the spot gold price dropped to 1802.25, you’d incur a loss. You’d
lose $400 (8 points x $50) – excluding any other charges – if you were to close the
position at the new sell price of $1,802.
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 Learn how to trade CFDs
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 3 Research the available markets
With us, you’ll get access to over 13,000 international markets via CFD trading. You can
also benefit from out-of-hours trading that can give you access to more markets and
opportunities. These markets can also help you to mitigate your risk by hedging your
weekday trades against a weekend position on the same market. Some of our exclusive
weekend markets include weekend GBP/USD, FTSE 100, Wall Street and Germany 40.

Below are the most popular markets you can trade with us:

Shares: choose from thousands of shares – go long or short on stocks like Apple,
Tencent and eBay

Indices: trade over 80 global indices, including the EU Stocks 50 and the S&P 500

Forex: get exposure to more than 80 forex pairs, including majors like EUR/USD and
USD/GBP, as well as minor and exotic pairs like SGD/JPY and GBP/TRY

ETFs: choose from a wide range of ETF markets, covering indices, sectors,
commodities and more

Bonds: trade a variety of government bonds and bond ETFs

Commodities: buy and sell over 35 different types of commodities, such as gold, oil
or orange juice

Interest rates: take a position on the future short-term (quarterly) direction of a

range of global interest rates

IPOs: buy IPO stocks before and after they list on various exchanges across the globe
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 4 Know the risks of trading and how to manage them
It’s vital to understand the risks of trading, and to take the necessary steps to manage
them effectively. We provide several tools to help you manage your risk, including stop
losses and limit orders.

What are the risks of trading?

There are a number of risks associated with trading. Since CFDs are leveraged products,
they give you increased exposure to the underlying asset at a fraction of cost.

However, any losses you make will be based on the full position size and could exceed
your initial deposit – so, it’s important that you manage your risk properly.

Learn all about risks in trading and how to manage them

Risk management tools

There are a number of risk management tools you can use when trading, such as stops
(also called stop-losses) and limits.

Stop-loss orders will automatically close your position if the market moves against
you. However, there’s no guarantee they’ll protect you against slippage

Guaranteed stops offer complete protection, closing your position at the exact price
you’ve specified. Note that, when this stop is triggered, you’ll be charged a premium

Price alerts help you to keep track of market activities. This’ll be done by sending
push notifications or emails notifying you on when a specified market level is reached
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 5 Learn more about trading styles and strategies
Your trading style and strategy will depend on your personal preference and risk
appetite. Although they’re sometimes used interchangeably, trading styles and strategies
aren’t the same.

Basically, the style is the main plan on the trading frequency, while the strategy is the
method you’ll use as a guideline on when to open and close positions. We’ve outlined
some of the most popular styles and strategies below.

What is a trading style What is a trading strategy

A trading style is the preference you have when it comes to the frequency of your
trading activities, ie whether you’re looking trading over the long or short term. You can
adapt a style based on the behaviour of the market you’d like to trade.

Trading style Timeframe Holding period Trading volume Further resources

Position trading Long term Weeks, months or years Low Learn more

Swing trading Medium term Days to weeks Medium Learn more

Day trading Short term Intraday High Learn more

Scalping Very short term Seconds to minutes Very high Learn more
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 6 Create a trading plan
A trading plan is a comprehensive decision-making tool you can use to help you work
towards your goals. It can cover a range of factors, including what assets to trade, when
to do so, how much to spend on a single position and how to manage your risk. This plan
should be tailored to your specific circumstances and must be adapted to factor in your
risk tolerance and buying power.

7 Start trading on a practice account

You can open a free demo account with us to put your newly acquired trading
knowledge to the test. This is a risk-free environment that enables you to cut your teeth
trading using $20,000 worth of virtual funds. Once you’ve gained enough confidence
and you’re familiar with trading on the platform, you can then decide whether you’d like
to upgrade to a live account.
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 Open demo account

8 Get into trading by opening your live account

Once you’ve practised trading with a demo account and you feel you’ve refined your
trading plan and skills, you can open a live account with us. You’re under no obligation to
deposit funds immediately.

Here’s how to open your live trading account:

1 Fill in a form: you’ll be asked about your trading knowledge to ensure you get the
best experience

2 Get verification: we can usually verify your identity promptly

3 Fund your account and start trading: deposit funds into your account when you’re
ready to start your trading journey. There's no minimum required deposit. You can
also withdraw your money whenever you like for free

Open live account

FAQs
What is trading?

How do I start trading?

What risks should I know about before getting into trading?

How can I learn more about trading?

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 Try these next
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Trading for beginners: a guide

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How to choose the best forex broker

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How to find the best day trading platform

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Practise on a free demo
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lose Group Holdings
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when trading
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in 1974, and You can
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