How to start trading online
Learn how to trade online, and access key markets – like shares, indices, forex, commodities and more – with our award-winning platform.1
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
Access a world of markets through online trading
Here are the five steps you’ll need to follow to start trading online:
Learn more about online trading
Online trading is a way for traders from a variety of backgrounds, and with diverse levels of experience, to access a wide range of the world’s most popular financial markets. When trading online with us, you’ll use contracts for difference (CFDs) to speculate on the price movements of underlying assets – without ever owning the asset itself.
CFDs are financial derivatives that track the price of the assets on which they’re based. Traders using derivatives never take delivery of the underlying, whether it be a physical commodity like gold or oil, foreign currency, or a security like company shares.
Online trading vs investing
Online trading isn’t the same as investing. Trading using CFDs enables you to speculate on both rising and falling asset prices (going long or short). Going long means that you think the underlying’s market price will rise; on the other hand, going short’ means that you think it’ll fall.
Either way, if you predict the market movement correctly, you’ll profit. If the market moves against your prediction, on the other hand, you’d incur a loss. In both cases, the difference between your position’s opening price and closing price, multiplied by your position size, ie number of contracts, is your profit or loss (excluding any
If your forecast is correct and the market decreases – meaning that you buy the derivative back at a lower amount – you’d earn a profit. Conversely, if the market price appreciates, you’d cut a loss. When going short, the difference between the opening sell price and the closing buy price is your profit or loss (excluding any additional costs).
It’s important to note that short selling is a high-risk trading method because share prices can, theoretically speaking, keep rising. You can use risk management tools like attaching stops to your positions to protect yourself by capping your maximum potential loss.
Derivatives like CFDs enable you to trade with leverage, which lets you open a trade by depositing only a fraction of the total exposure of your position – this initial deposit is called margin.
At a margin requirement of 20%, your leverage ratio is 1:5. This means that every 1% movement in the market price results in a 5% change in your deposit. While leverage can help to bring down your initial outlay, it’ll also act to amplify both your profits and your losses – so it’s vital to understand this feature of trading thoroughly before opening a position, and to take steps to manage your risk.
Investing, as opposed to trading, is the buying and outright owning the underlying asset. The full investment amount must be committed upfront. While investing enables going long, short selling is typically not possible. Similarly, profits are made if the underlying’s price rises, given that the investment is sold at a price higher than the original buy price.
If the price goes south, instead – and the investment is closed at a price lower than the original buy price – a loss would be incurred. In fact, the full investment amount is at risk as it’s possible for companies to go bankrupt, and share prices to go down to zero. With stocks, another possible way of profiting is through dividends payments (if made eligible).
Learn more about the differences between trading and investing
Remember, with us you can only trade derivatives via CFDs.
How to trade online
With us, you’ll use CFDs to access over 13,000 markets, including shares, commodities, forex, indices, ETFs and bonds. A CFD is an agreement to exchange the difference in price of an underlying, as calculated using the asset’s value at the time the contract is opened and the time it’s closed.
Suppose you analyse Tesla’s performance and subsequently buy five Tesla share CFDs since you believe that its price will rise from its current level of $700. Your potential profits or losses will be based on the price at which you close the position in relation to the opening price.
If your prediction is correct, and you close your position when the market reaches a sell price of $725, your total profits, excluding other costs, are calculated as follows: (725 – 700) x 5 CFDs = $125. If, however, the market moves against you, and you close at a level of $685, your loss would be $75.
You can trade both rising and falling markets with CFDs. To open your position, you’d buy a contract if you believe an asset’s price is set to increase, and you’d sell a contract if you think its price is going to fall.
Remember, all trading involves significant risk, and when using leveraged derivatives like CFDs, you could lose more than your initial deposit.
Get a risk-free online trading account
One of the best ways to learn more about online trading is to open a risk-free demo account with us.
Our demo accounts simulate the live market environment found in our award-winning trading platform,1 giving you access to over 13,000 CFD markets, including:
- Shares
- ETFs
- Indices
- Commodities
- Forex
Trading in a virtual market enables you to explore, experiment and learn with confidence. Our demo accounts come with a pre-set balance of $20,000 in virtual funds. By recreating the dynamics of trading using real funds, you get the opportunity to see how our products and financial markets work – all without putting any capital at risk.
Even experienced traders can use demo accounts to test new strategies, tools or ideas, safe in the knowledge that your experiments won’t result in any real losses.
Explore the markets you can trade online
Our online trading platform offers low spreads, exclusive opportunities to trade 24/7, out-of-hours trading, and gives you access to over 13,000 CFD markets.
The below image shows how market movement affects the outcome of your directional assumption as well as an overview of the markets you can trade with us using CFDs.
Our markets include:
- Shares
- ETFs
- Indices
- Commodities
- Currencies
- Bonds and interest rates
When trading with us, you have access to thousands of stocks via CFDs. Shares like those of eBay, Apple and Tesla are a popular security to trade.
As a representation of a unit of ownership in a company, shares appreciate or depreciate in value – ie in price – in step with supply and demand, which is often linked to a company’s performance. If market demand for a stock increases due to strong earnings, for example, the share price will increase, and vice versa.
An exchange traded fund (ETF) tracks the overall performance of an index, economic sector, individual market, etc. They work by either purchasing the basket of assets they’re tracking outright, or by using sophisticated investment strategies to mimic the movement of the underlying market.
ETFs you can trade using CFDs with us include:
- Stock index ETFs
- Currency ETFs
- Sector ETFs
- Commodity ETFs
An index like the S&P 500 measures the performance of a selection of the market’s most influential stocks. Indices’ constituents grouping is typically based on market value or share price. Similar to ETFs, indices can also track the performance of economic subsectors and individual markets.
We provide a range of indices to trade – including weekend trading on key indices.
A commodity can be defined as a natural resource or raw material that can be used in the production of goods or services. You can speculate on the price of commodities like gold, silver, oil, wheat and sugar using CFDs, without ever taking delivery of the physical underlying itself.
With us, you can trade commodities using the spot price, futures or options, including commodity-linked stocks and commodity ETFs.
Foreign exchange, or forex for short, is the world’s most-traded financial market – in fact, currency transactions worth trillions of dollars occur daily. Whereas some people exchange currency for trade and travel, forex trading is typically undertaken with the aim of earning a profit.
Our forex markets offer 24-hour trading, high liquidity and a wide range of major, minor, exotic and regional pairs. With us, you’ll trade forex using CFDs to access the spot, futures or options markets.
Our selection of bond futures markets enable you to capitalise on the inverse relationship between bond prices and long-term interest rates using CFDs. Because our contracts are off-exchange, you can deal in fractions, eg a position size of 0.5. Bond markets can be particularly useful for hedging against the interest-rate risk incurred by assets you already own.
Alternatively, you can take a position on the short-term (quarterly) direction of a range of global interest rates. Interest-rate CFDs can be useful in hedging against other investments affected by interest rates, such as mortgage repayments.
Get into the daily habits of a trader
Like most things worth attaining, some effort is required when trying to come to grips with how the financial markets work. Ongoing and thorough research to understand what trading concepts mean and how they’re linked is fundamental to making informed trading decisions.
Trading research and resources
Further, efficient execution of trading strategies relies on a solid understanding of market dynamics and the correct interpretation of market signals. You can develop your knowledge and skills using reliable educational content.
We offer a wealth of resources, including strategy and news articles, a handy glossary of trading terms, and a full educational series in the form of IG Academy. These include IG Trading the Markets (podcast), IG TV (available in the platform) and IG Webinars.
Technical and fundamental analyses
Technical and fundamental analyses are two different ways of interpreting and forecasting markets. Traders rarely rely exclusively on one or the other, and neither can forecast market movements with absolute precision or infallibility.
Technical analysis
Technical analysis adopts the point of view that markets show discernible patterns, which can be used to predict future movements. It looks to historical data and employs a wide variety of statistical techniques to identify these patterns to forecast market trends.
Analysts using technical indicators like Bollinger Bands, the relative strength index (RSI) and the moving average convergence divergence (MACD) believe that vital market information is contained within these indicators.
Fundamental analysis
Fundamental analysis looks to a range of factors to arrive at an estimation of a share’s true or ‘intrinsic value’. This value is what the analyst believes the price of a share should be. If this price deviates from the current market price, and you trade based on this, you’d profit if the market moves towards this ‘true’ value. However, if the market moves against your position, you’d incur a loss.
Fundamental analysis focuses on macroeconomic factors, sector performance indicators and industry news, along with information gleaned from publicly available income statements and balance sheets, to arrive at a stock valuation.
If this valuation is, for example, below the current market price – it’s argued – the market price is expected to adjust over time so that the stock is correctly valued. If you trade based on this, shorting the stock, you’d earn a profit if the market moves as expected. If the stock price rises instead, you’d incur a loss.
Learn more about trading styles and trading strategies
What is a trading style?
Your trading style is dependent on your holding period, trading volume and risk preferences. The holding period can be for the long, medium and short term, and simply refers to the duration between opening and closing a position.
Choosing which trading styles you prefer can depend on various factors, eg buying power, risk tolerance, trading volume and market volatility.
| Trading style | Timeframe | Holding period | Trading volume | Further resources |
|---|---|---|---|---|
| Position trading | Long term | Weeks, months or years | Low | Learn more |
| Swing trading | Medium term | Days to weeks | Medium | Learn more |
| Day trading | Short term | Intraday | High | Learn more |
| Scalping | Very short term | Seconds to minutes | Very high | Learn more |
What is a trading strategy?
Closely related to trading styles, trading strategies are defined by the range of factors you look to when deciding whether to open or close a position. Many well-known strategies rely on technical analysis and use technical indicators as trading signals. A strategy is a very specific methodology for defining at which price points you will enter and exit trades.
| Trading strategy | Core characteristics | Further resources |
|---|---|---|
| Trend trading | Used for medium and long-term positions. Attempts to identify market trends (rising or falling) and adopts long or short positions. Good for position and swing trading styles. | Learn more |
| Range trading | Used for short and very short-term positions. Traders look to trade on price oscillations that occur within a range between known ‘support’ and ‘resistance’ levels. Good for day and scalping trading. | Learn more |
| Breakout trading | Used for short and medium term positions. Prices ‘breaking out’ of a normal range of fluctuations are used as signals to open positions. Good for day and swing trading. | Learn more |
| Reversal trading | Can last varying amounts of time. Based on identifying reversal points in current up or downward trends. A reversal marks a key turning point in market sentiment. Good for position and swing trading. | Learn more |
Spend a day in the life of a trader
To further your knowledge about best practices, learn how professionals approach their daily trading routine. This will offer insight into research habits, trading styles and trading strategies, general market behaviour and even personal philosophies.
Here’s a brief summary of a few key points to consider:
- Even before markets open, traders plan their day to ensure that they remain disciplined and emotionally unreactive when trading. Remaining detached allows for decisions based on solid economic rationale rather than unfounded optimism or fear. In turn, this prevents risky, impulsive or overly cautious behaviour
- Early trading – when stock markets open – is often characterised by volatility and liquidity. This is because the market opening gives investors the opportunity to act on information and news coming from international and overnight markets. Many traders use the early market as an indicator of the market sentiment to be expected later in the day
- After markets close, professionals typically assess their trades and recap the day’s market behaviour. They do this to gain insight into prevailing market sentiment, volatility and liquidity, but also to review their own trades. By analysing each decision and its consequences, a trader can refine and hone their skills
- Out-of-market hours events, either occurring locally or internationally, could have profound impacts on markets when they re-open. Traders must have an awareness of market-related news at all hours
- Traders may engage in night trading to access international markets, and even work Saturdays and Sundays to gain exposure to weekend markets. Opportunities could arise at any moment, and professionals need to be agile and responsive
Practise online trading until you’re ready to open a live account
Use our demo to continue practising until you feel confident enough to engage in actual trades on our award-winning platform.1 Because the demo simulates the live environment, you’ll be familiar with the platform when you create your live account.
FAQs
What is online trading?
Online trading is a popular way to gain exposure to the financial markets through derivatives like CFDs. When trading online, you’ll speculate on the price movements of an underlying asset without ever taking ownership. This is because derivative instruments are designed to track the price of the asset on which they’re based, and you can trade both rising and falling markets by ‘going long’ or ‘going short’.
What’s the difference between trading and investing?
Trading and investing differ in a number of ways. Financial derivatives like CFDs enable you to speculate on possible upward and downward movements of underlying assets’ prices at only a fraction of the full trade value, without owning the asset itself. If your prediction is correct, you’d make a profit; if it’s incorrect, you’d incur a loss. Both potential profits and losses are magnified to the full value of the trade.
Investing, on the other hand, gives ownership of the underlying. Shorting isn’t typically available with investments, which means that profits can only be made from rising prices – through buying low and selling high. If the investment is sold at a price lower than the original buy price though, a loss is incurred. In the case of stocks, dividends are another way to potentially profit – however, dividend payments are subject to eligibility.
Remember, with us you can only trade derivatives via CFDs.
How can I learn to trade online?
It takes time and effort to learn how to start trading and ultimately trade online effectively because financial markets are complex. We offer several accessible and reliable educational resources to help you better understand the dynamics of online trading and the many risks involved.
For example, IG Academy is designed to provide traders of all experience levels with information about how financial markets work and how to trade using CFDs
Can I practise online trading?
Yes, you can practise trading online by signing up for a demo account. Our demo accounts simulate the live market environment found in our award-winning trading platform, giving you access to over 13,000 CFD markets, including:
- Shares
- ETFs
- Indices
- Commodities
- Forex
Our demo accounts come with $20,000 in virtual funds, which will allow you to experiment and learn with confidence. Without putting any actual capital at risk, you can recreate the dynamics of trading with real funds.
How can I learn more about the ways to trade online?
You can learn more about how to trade via CFDs online using various resources on our website.
Some resources for CFDs include:
How can I learn more about the markets to trade online?
You can browse our website to explore details about the markets you can trade online. Our countless resources include content that’s specifically dedicated to each market, including:
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