At ETX you can speculate on Share price movement in two ways; with a Spread betting or CFD trading account. Our guide to trading Shares will help you plan which market is right for you, teach you how to choose the best time to open a position and learn more about monitoring your trade and managing your risk responsibly.
Get started with Shares trading
- Choosing the right Share or Shares to trade - When you trade with ETX you’ll be able to choose from a wide range of Shares from around the globe. With markets from the UK, US, Europe and Asia, there are plenty of trading opportunities to get you started. In deciding which Share to trade, make sure you choose one that you feel you have a good understanding of, or perhaps a company that you follow regularly and know well.
- Spread bet or CFD? - All of our Shares markets are available to trade as either a CFD or Spread bet. Deciding your trade type will depend on the goals of your trading strategy, the length of time you’d like to hold the position and tax considerations.
- Decide when to enter the market - Plenty of background research and analysis will have been done before you decide to open your position and this context should provide you with valuable insights about the right time to start trading. You’ll understand current market trends and sentiment and know the long-term price direction of the Share you’d like to trade as well as have an idea of likely future price movements. This will determine whether you open a Buy or Sell position.
- Making your Share trade - Smart risk management is crucial to any successful trading strategy and Shares trading is no different. At ETX we offer a range of powerful tools like stop losses and limit orders to help you set a level of risk you’re comfortable with. You can also use Guaranteed Stops to protect your position against extreme volatility. It is important that you choose a position size that reflects your budget and that you always have enough margin to cover your position(s).
- Monitoring your trade and exiting the market - When you trade Shares online you may have a short-term view or perhaps your strategy calls for a longer time frame. No matter how long you intend to stay in the market, you should continue to research and analyse the events and data releases that could impact your position. Use our advanced indicators and drawing tools to define resistance and support levels that could help you identify the most profitable time to exit the market.
How to decide on the right Share market to trade
Trading Shares is similar to any other investment in that a strong knowledge around the factors impacting the market, how and why prices move and a broad context for overall market performance is crucial to long term success.
If you are just starting out, make sure that you do plenty of research into the company you’re considering. There is a great deal of in-depth information available on many company websites including things like financial performance statements, investment plans, dividend payments, merger details, latest acquisitions, strategy reports and more.
All of this information will help to give you a good understanding as to the relative health of the business. Make sure you read the latest research and analysis from our market experts for even more insight into current market sentiment and use our powerful charting package to evaluate company performance over time and identify key trends.
Choose the right trade type
Whether you choose to trade your chosen Share or Shares as a CFD or spread bet will depend largely on your trading strategy and considerations about your overall goals.
There are a number of key differences between a Spread betting and CFD trading account. We have listed some of the most fundamental differences in the table below to help you decide which trade type is right for you.
It is important to bear in mind that whichever type you choose you will be trading on leverage which can help maximise profits but also increases risk of loss.
|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.
Selecting the best time to enter the market
Once you know which company you want to speculate on, and you have decided whether you’d like to trade using CFDs or Spread betting, your next key decision is determining the most beneficial time to enter the market.
In researching the company you want to trade you will have built up a strong picture of the overall health of that company’s current market position.
Keep an eye on company reports and announcements which may provide information about things like potential expansions, changes in management and new product releases – all of which could impact Share prices.
Your in-depth research and analysis should also have highlighted periods of strength and weakness over a large enough timeframe that day-to-day rises and falls in fortune do not distort the true picture of a business’ worth.
With a clear picture of the company’s financials, a good understanding of its future plans and a broader knowledge of the health of the sector in which it operates, you’ll have a good idea of market sentiment and trends.
Using this information and research will help inform your decision about when best to enter the market and whether you’ll open a Buy or Sell position.
Making your trade
To make your trade on our advanced, award-winning TraderPro platform, simply search for the market of your choice using the search field, or navigate to it using the collapsible menus on the left of the platform interface.
Then, open a trade ticket and choose the direction of your trade and the amount you’d like to invest.
Before you open your position, remember to attach a stop loss or free Guaranteed Stop* to lock in your risk level and protect yourself against excess market volatility.
Monitoring your position
Once your trade is live it is important that you monitor market movement and closely track events, economic data releases and news that could impact your position. Use an economic calendar to look ahead at relevant, upcoming data releases and make sure you know when company annual and interim results are announced.
You can use our powerful charting tools and indicators to track price movements once your position is open and these can help you view trends in real time.
Our intuitive iOS and Android apps will also help you react to market moving events, whenever and wherever you go.
*Free Guaranteed Stops are only free at certain times, on some markets for retail clients only - click here for more information