Register an account

Choose a CFD (contract for difference) trading broker by using our comparison, then register for an account before you begin trading. The information you need to give includes:

  • Name

  • Email address

  • Telephone/mobile number

  • Date of birth

  • Address

  • Identification, e.g. passport number

You may also need to answer the following questions:

  • How much knowledge do you have in trading?

  • How much experience do you have in trading?

  • How often do you trade?

If you have never traded before, just specify zero or none for each question.

Add money to invest

Before you can make a trade, or open a position, you need to add money to your CFD account.

Each trade only uses a small percentage of your funds when you open a position.

All CFD trades require you to put down a deposit, known as the margin, to help cover any losses on your trade.

Choose where to trade

You can trade CFDs in several markets, including:

  • Commodities: e.g. gold, silver, oil, gas, wheat, oats and sugar

  • Equities: e.g. Tesco, Barclays, BT Group and Vodafone

  • Indices: e.g. FTSE 100, Wall Street and US Tech 100

  • Foreign Exchange (FX): e.g. euro/Japanese yen and US dollar/Canadian dollar

How can you choose?

Most CFD platforms give you the option of checking the previous performance of a market before you place your bid, but you can also look at:

  • Performance charts: Shows how a market has performed, for example, from the last year based on daily readings (although this does not guarantee future success).

  • News: Updates on economic impacts that could affect your trade from news feeds worldwide.

  • Market Information: Explains how much you can trade and other information, like the cost of any commission charges.

Make a trade

To make a trade, choose whether to go long or short on a position and the amount you want to trade.

The margin will depend on the trade. You usually need a higher margin for riskier investments.

CFD trades which have a higher margin could cause you to lose a large percentage of your money, but also have the potential to make you a large profit.

CFD trading tools

Rather than watching your trades constantly, you can use CFD trading tools to help you manage your trades, for example:

  • Stop loss: To avoid a big loss, set a value for your position to close so your losses are only as much as you are prepared to lose.

  • Limit order: This closes your position once your trade reaches a certain a value that reflects the amount of profit you are happy to take.

Here is an example of how a stop loss works:

  • You open a trade on the FTSE 100, worth 6801

  • You think the value will go up, so you go long (buy)

  • In case the market goes against you, you choose a stop loss at 6791

  • If the value drops sharply to 6780, your position still closes at 6791, limiting your losses

Here is an example of how a limit order works:

  • You open a trade on the FTSE 100, worth 6801

  • You think the value will go up, so you go long (buy) and choose a limit order at 6806

  • If the value rises to 6806, your position will close and you will make a profit

Check your trade

Every CFD platform gives you tools to help you manage your CFD trades, meaning you do not have to keep watching the performance of your trades.

To avoid large losses, make sensible trades, for example, avoid investing more because you are losing money on another trade.

Your CFD platform lets you see all of your open trades, giving you easy access to them while they remain active.

Close your trade

You can close a trade at any time, even if you have set a stop loss or limit order on it.

When you are ready, go to where your platform lists your active trades then click on them to choose to close them.

You are responsible for any trades you make, so you need to understand the market you invest in if you want to increase your chances of making a profit.