There are a wide variety of Indices markets available for you to trade at ETX, so how do you decide which market is right for you?
You can trade Indices like the UK 100 and Wall Street with a Spread betting or CFD trading account and our guide to trading stock Indices will help you get started.
- Find an index with which you are comfortable
We offer Indices from the UK, US, Asia, Australasia and Europe. It is important that when deciding which Stock Index to trade that you choose one you are comfortable with and may have some prior knowledge of. Research, news and analysis can help you identify what type of trading opportunities different Indices offer, as well as how volatile the price movements within these markets can be.
- Choose whether to Spread bet or trade CFDs
You can trade Indices at ETX in two different ways, as a spread bet or as a CFD. Choosing the right type of trade is important as there are slight differences between the two which may influence your trading decisions.
- Decide whether the market is bullish or bearish
Once you feel comfortable enough with your research and feel that you have identified a trading opportunity in your chosen index, you’ll need to decide a direction to trade in. Whether that means that you Buy (go long) or Sell (go short), both spread betting and CFD trading allow you to profit from falling as well as rising markets for greater flexibility.
- Placing your Indices trade
When placing your trade it is crucial that you act to protect yourself against volatility and losses beyond what you’re comfortable with. ETX offers smart risk management tools like stop losses, limit orders and free Guaranteed Stops* on selected markets. Remember to choose a trade size that fits your budget and doesn’t over-leverage your account. Markets can be unpredictable so ensuring you protect against excessive losses is important to your long-term success.
- Monitoring and closing your trade
Once you have opened a position on your chosen index, staying on top of market movement can help ensure you lock in profits and minimise any potential losses. With our powerful, award-winning ETX TraderPro platform available for both iOS and Android you can monitor your position on the go and get alerts about your position to help you make better trading decisions.
Deciding on the right index to trade
When deciding on the index or Indices you would like to trade, it is important that you feel confident in understanding how and why prices move within your chosen market(s).
Market news and research can help you to identify trends, spot potential trading opportunities and recognise patterns within your chosen market.
Our powerful charting package features advanced, precise tools that can help you evaluate market performance and gauge price shifts. Choose from a variety of chart types, indicators and intuitive drawing tools to follow price action in your market closely.
Once you’re confident you understand the market you’re ready to start trading.
Spread bet or CFD?
You can trade all of the global Indices available at ETX with either a Spread betting or a CFD trading account.
The trade type you decide on will depend on the overall goals of your trading strategy as well as things like how long you intend to hold your position and tax considerations.
The table below gives you a good overview of the differences between our two main account types.
|Profits are free from Capital Gains Tax.*
||Profits are liable for Capital Gains Tax.*
|No Stamp Duty
||No Stamp Duty
||No expiry on cash CFDs
|Price per point
||Contract per point
|Losses cannot be offset for tax.
||Losses can be offset for tax
* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
Buy or Sell?
One of the biggest advantages of speculating on market movement with a Spread betting or CFD trading account is that, unlike traditional investing, it allows you to profit from both rising and falling prices.
Your research into the index you want to trade will guide your decision whether to Buy (go long) or Sell (go short). If you think the market trend is positive and that the price of your chosen index will rise, you will choose to open a Buy position.
Conversely if you think market sentiment may be turning negative and prices are likely to drop, you would open a Sell position.
Protecting your position
Risk management is an important part of your trading plan and while research and analysis can give you a feel for market trends, they are not infallible and the market can still move against you.
At ETX we offer risk management tools which allow you to control your risk exposure and manage your positions responsibly.
Choose from tools like Stop Losses, Limit Orders and Trailing Stops to help lock in profits and protect yourself from volatility should prices shift rapidly.
We also offer free Guaranteed Stops* on a wide range of our most popular markets including Indices like the UK 100, Wall Street and Germany 30.
Knowing when to exit the market
Once your position is live it is crucial that you monitor price action in your chosen market and note any trends which could be a precursor of future market movement.
When you trade with our cutting-edge TraderPro platform you’ll be able to use powerful drawing tools and indicators to track market trends.
Our fast, reliable iOS and Android apps will help you keep your finger on the pulse of market events, letting you review your position on the go and ensuring that you never miss a trading opportunity.
You can use trailing stops or regular stop loss orders to close out your order automatically or you can choose to exit the market manually when your position reaches a certain price point, the power of our platforms means the choice is yours.
*Free Guaranteed Stops are only free at certain times, on some markets for retail clients only - click here for more information