CFDs and spread betting are both leveraged products, which makes managing your risk and protecting yourself from excess market volatility an important first step before you consider placing your first Indices trade.
Which tools can I use to manage my risk when trading Indices?
Stop Loss Orders
You can place a stop loss directly from the trade ticket in TraderPro. Simply select the option and fill in the price at which you would like your position to be automatically closed out.
If the market moves through your selected price point, your position will be closed out. You won’t need to take any action so you can trade with greater peace of mind. Stop losses give you added protection should market volatility spike and the market moves against you.
Remember Stop Losses protect you against market movement against your position but do not guarantee to protect you against sudden, excessive market volatility and market gapping.
A Guaranteed Stop is an added layer of protection for your position and is guaranteed to be triggered at the precise level you have specified, irrespective of market gapping or volatility. A Guaranteed Stop is especially beneficial if you are trading Indices around risk events. We offer free Guaranteed Stops* on a number of our most popular Indices markets including the UK 100 and Wall Street. When you trade with ETX you can make use of our free Guaranteed Stop* Loss Orders on a wide range of markets like:
- Germany 30
- Wall Street
- UK 100
- SP 500
- US Tech 100
- Brent Crude
You can set your free Guaranteed Stop during these selected times.
Trailing Stops are a smart, particularly powerful tool that allows you to “track” market movement by a setting price point above or below market value at which you’d like your position to be closed out. Your Trailing stop will then move with the prevailing market trend, allowing you to lock in profits as well as minimise losses should the market move against you.
While an economic calendar may not immediately spring to mind as part of a risk management strategy, it can be an invaluable reference for factoring in events which have the potential to impact market prices.
By keeping a close eye on economic releases which are related to the market you have decided to trade you can anticipate potential moves as well as positive and negative sentiment.
*Free Guaranteed Stops are only free at certain times, on some markets for retail clients only - click here
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