There are certain risks associated with trading on the financial markets – learn how to manage them with our range of tools and resources.
Watch our five-step video guide to managing risk, or see below for more details on limiting your exposure.
What are the risks?
CFDs carry risk in the same way that any financial product carries risk – if the market moves against you, you lose money. However, the risks associated with CFDs can be greater because they are leveraged products.
What is leverage?
Leverage enables you to gain a large exposure to a financial market while only tying up a relatively small amount of your capital. In this way, leverage magnifies the scope for both gains and losses.
Is leveraged trading risky?
Even though you only put up a relatively small amount of capital to open a position, your profit or loss is based on the full value of the position.
Therefore, the amount you gain or lose could be relatively large compared to your initial outlay.
What can I do to control my exposure to risk?
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Develop a trading plan, and stick to it
A trading plan can help you clearly define and achieve your overall financial trading goals.
Our education section offers advice on how to define and adhere to a personal trading plan.
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Start slowly, and build your skills and expertise
If you’re new to leveraged products, you can get used to how leverage works by trading in small sizes while you develop your understanding.
New clients can trade at reduced minimum trade sizes for two weeks and reduced commissions for six weeks with our introduction programme.
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Understand the markets you want to trade on
Ensure you understand the factors that influence different markets so you can base your trading strategies on the most relevant information.
Our trading strategy section covers each market we offer in great depth, and our experts provide regular data and commentaries in news and trade ideas.
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Monitor your open positions
Ideally you’d be able to constantly monitor your open positions and react to market movements. Practically, however, this is often difficult.
Our platform is available via our free app, so you can monitor trades on your mobile or tablet. You can also set up price alerts to notify you when specific prices are reached.
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Use stops and limits to protect against sudden market movements
Sudden market movements can cost you if you aren’t able to react immediately, or if the market ‘gaps’, moving sharply up or down with no trading in between. Gaps can occur overnight when prices change while the market is closed, or during the day in response to an unusual event.
Our risk management tools can help to protect you from sudden market movements and gaps, and to lock in profits when the market moves in your favour.
These include stop losses, guaranteed stops, trailing stops and limit orders.
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Keep learning
Improve your success rate by learning more about the markets you’re trading on and exploring new trading strategies.
Build your knowledge and expertise with our comprehensive Trading skills section, get an aggregated view of how IG clients are trading, and hone your skills with a free demo account.
Open an account now
There's no minimum balance required to open an account and there's no obligation to fund or trade.
You might be interested in...
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Risk management
Protect profits and limit losses with our range of risk management tools.
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Learn about IG
See how we've been changing the face of trading for more than 40 years.
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Fund security
All client money is held in segregated trust accounts in accordance with ASIC's client money protection rules
Help and support
Or ask about opening an account on 1800 601 799, or +61 3 9860 1799, or helpdesk.au@ig.com.
If you're calling from NZ, you can contact us on 0800 442 150
We're here 24 hours a day, except from 7am to 5pm Saturdays (AEST).
