How to start and get into trading: your guide
Ever wanted to start trading, but simply didn’t know where to begin? We’ve put together a guide on how to get started. Learn how to get into trading with us, the world’s No.1 provider.1
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Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We’re available from 9am to 5pm (UK time), Monday to Friday.
Contact us 0800 409 6789
Call ##newaccountsfreephone## or email newaccounts.uk@ig.com to talk about opening an account.
Contact us 0800 195 3100
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Get info fast via our instant help and support portal. Available for account queries, ProRealTime, product info and more.
Visit help and support for more information.
Call 0800 409 6789 or email helpdesk.uk@ig.com if you have any questions about trading or investing. We’re available from 9am to 5pm (UK time), Monday to Friday.
Contact us 0800 409 6789
Understand how trading works
Trading is the buying and selling of an asset of your choice – be it indices, shares, forex or commodities – without owning the underlying instrument. With us, you can trade using three types of derivatives. There are ETPs (exchange traded products) – Turbo24 with us, spread bets, contracts for difference (CFDs) and options.
When trading, you can speculate on both the upward and downward price movements of an asset’s price. If you think market prices will rise, you’d go long. If you think they’d fall, you’d go short. If your prediction is correct, you’d make a profit; contrarily, if it’s incorrect, you’d incur a loss.
How to start trading
There are a number of different ways to start trading with us – the foremost being turbos, our most popular form of ETPs. With us, you can trade turbo warrants 24 hours a day, five days a week, without any commission.2 Turbos are leveraged exchange traded products, which give you the added security of a knockout level which you choose yourself, so that your risk of loss is always limited.
You can also trade using spread bets or CFDs. With spread bets, you’d bet an amount per point of movement in the underlying market. With CFDs, you’d buy or sell contracts to exchange the price difference of a financial instrument between the open and close position. Whether you make a profit or loss will depend on the outcome of your prediction.
Spread bets and CFDs are leveraged derivatives – they enable you to get full exposure to the value of the underlying asset at a fraction of the cost, by using a deposit called margin. Leverage will result in magnified profit or loss, so it’s important to ensure that you manage your risk carefully.
For another form of leveraged trading, you can try options. As with ETPs and CFDs, you won’t have to take ownership of any underlying assets. Instead, you’ll have the right, but not the obligation, to buy or sell a set amount of a financial instrument at a certain price on a certain date.
Leverage and margin 101
Leverage is a tool used when trading derivatives like ETPs, spread bets, CFDs and options. Trading with leverage means that you only have to lock in a fraction of the total cost of your position, while still getting full exposure to an underlying asset. This means that you can take a position on larger volumes, which increases your potential gain, but also your potential loss.
Let’s look at Turbo24 as an example. With turbos, you can open a position using margin (a deposit). This means you’re paying an initial deposit, that’s a fraction of the full value of your trade, with your provider loaning you the rest.
With turbos (and all ETPs), all potential costs are included in the price of your initial outlay. When spread betting, or trading CFDs or options, you’ll pay an initial amount upfront, also called margin, to open a larger position. For example, at a margin requirement of 20%, you’d need to deposit €200 to open a shares position worth €1000. In the case of indices, a 5% margin would require a €50 to open a position at €1000. And for forex, a 3% margin requirement would need you to deposit €30 to open a position worth €1000.
Trading on margin comes with risk because the position is still based on full exposure. This means you can gain or lose money quickly, which is why you should set stop orders on all positions to ensure you don’t lose more money than you’re comfortable with.
Let’s take CFDs as an example. If you don’t set stops on your CFD trades, you could make a significant enough loss to be placed on margin call, where your positions might be closed out automatically. However, note that our margin policy doesn’t guarantee against your capital running into a negative balance, depending on region and account type (retail or professional).
The margin call will be triggered when your equity drops below 50% of your initial deposit requirement. We’ll do our best to contact you, although not an obligation, when your equity drops beneath 99% or 75% of your margin. However, it’s your responsibility to ensure your account has sufficient funds.
To avoid having your positions closed, transfer enough funds into your account to increase your equity above the margin requirement, or close some positions to reduce it.
You can trade rising and falling prices
When trading, you can speculate on rising or falling asset prices. If you go long and the price rises, you’ll make a profit – but if it falls, you’ll make a loss. The opposite is true when you open a short position.
Again, if we use CFDs as an example, that might look like this:
What is the bid-ask spread?
A spread is the difference between the bid (sell) and ask (buy) price that’s quoted for an asset. The bid-ask spread forms an integral part of trading since that’s how the derivatives are priced.
By applying a spread, the asset’s buying price will be a bit higher than the underlying market price and the selling price a bit lower.
Why a top trading platform is important
Our award-winning trading platform offers various tools and resources that enable you to trade the way you want, from wherever.1
It provides access to price charts, which you can use to track the performance of numerous asset classes across more than 17,000 financial markets worldwide. Our platform also offers technical indicators and a Reuters news feed.
Trading example
Let’s use a Turbo24 example to help you understand how trading works:
Suppose you are wanting to trade on the Germany 40 index with turbos, which is currently valued at €100 in the underlying market (the index). You think this price will go up, so you buy one long Turbo24.
Now, you’ve bought one Turbo24 and, according to the current underlying index’s price, that position’s worth €100. But because turbos are leveraged, you’d only need to put up a 10% margin to open your position, or €10. If your prediction is correct and the Germany 40’s price rises by €10 to €110, that’s a 10% increase. Your turbo will track this price rise point for point, and its new value will be: €110 – €90 = €20. This gives you a 100% profit on your initial €10 outlay.
With CFDs, you’d be liable to both gain and lose substantially more than this margin amount. But with Turbo24, there’s a safety net – knock-out levels. You choose a knock-out level of €90, because the knock-out level (which acts like a guaranteed stop) must be below the current market price with long turbos. Your knockout level would automatically close the trade if the Germany 40 price dropped to €90 or below, only costing you €10.
You choose your own knock-out level. The closer your knock-out level is to the current price, the lower the price of your turbo and the higher the leverage. Greater leverage means that any movement in the underlying price – up or down – will amplify your profit or loss.
Let’s say you’re incorrect in your prediction and the Germany 40’s price falls, you’ll make a loss – but only up until the market reaches your knockout level, which means you can only lose a maximum of €10.
Research the available markets
With us, you’ll get access to over 17,000 international markets. Below are the most popular markets you can trade with us:
- Shares: go long (‘buy’) or short (‘sell’) on over12,000 shares, like Apple, Tencent and Lloyds
- Indices: trade over 80 global indices, including the FTSE 100 and the S&P 500
- Forex: get exposure to more than 80 forex pairs, including majors like USD/GBP and EUR/USD, as well as minor and exotic pairs like SGD/JPY and GBP/TRY
- Commodities: buy and sell 35 different types of commodities, such as gold, oil or orange juice
- IPOs: buy IPO stocks before and after they list on various exchanges across the globe
Know the risks of trading and how to manage them
It’s vital to understand the risks of trading, and to take the necessary steps to manage them effectively. Fortunately, we provide several tools to help you manage your risk, including stop-losses and limit orders.
What are the risks of trading?
There are a number of risks associated with trading. Because you’re speculating on an underlying asset instead of owning it, you’ll make a profit if your prediction is correct – but also a loss if you’re incorrect.
Let’s look at turbos as an example again. Turbo24 is a limited risk product, because they have a built-in knockout level, which you set yourself. If the market turns against you, your turbo trade will automatically be closed when your losses hit the pre-set knock-out amount.
Another example is CFDs, which are more complex and slightly riskier. Since they are leveraged products, they give you increased exposure to the underlying asset at a fraction of cost. However, any losses you make will be based on the full position size and could exceed your initial deposit – so, it’s important that you manage your risk properly.
As a third example, let’s look at options – also a leveraged product. However, the leverage works differently. You’ll still pay a marginal amount upfront, called the premium, at the opening of the options contract. If you sell a call option, this constitutes your maximum profit possible, but exposes you to a potentially unlimited loss, as soon as the price of the underlying crosses the strike price before the expiry of the option. However, if you buy an option, you can benefit from potentially unlimited gains.
Risk management tools
While Turbo24’s knock-out levels act as a built-in guaranteed stop, other types of trading are riskier. For other leveraged products like spread bets, CFDs and options, there are a number of risk management tools you can use when trading, such as stops (also called stop losses) and limits.
- Stop-loss orders will automatically close your position if the market moves against you. However, there’s no guarantee they’ll protect you against slippage
- Guaranteed stops offer complete protection, closing your position at the exact price you’ve specified. Note that, when this stop is triggered, you’ll be charged a premium
- Price alerts help you to keep track of market activities. This’ll be done by sending push notifications or emails notifying you on when a specified market level is reached
Learn more about trading styles and strategies
Your trading style and strategy will depend on your personal preference and risk appetite. Although they’re sometimes used interchangeably, trading styles and strategies aren’t the same.
Basically, the style is the main plan on the trading frequency, while the strategy is the method you’ll use as a guideline on when to open and close positions. We’ve outlined some of the most popular styles and strategies below.
- What is a trading style
- What is a trading strategy
A trading style is the preference you have when it comes to the frequency of your trading activities, ie whether you’re looking trading over the short, medium or term. You can adapt a style based on the behaviour of the market you’d like to trade.
| 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 |
A trading strategy is a plan you’ll use to analyse market performances and keep track of its prices. Analytical tools like fundamental and technical analysis are useful here. Trading styles and strategies aren’t the same. The style is the main plan on the trading frequency, while the strategy is the method you’ll use when opening and closing your positions.
While fundamental analysis will help you with predicting shifts in prices, most strategies concentrate on tracking particular technical indicators.
Fundamental analysis will measure a company’s intrinsic or actual monetary value by taking into consideration certain economic and financial factors like its balance sheet, management forecast and macroeconomic markers.
Technical indicators are maths computations plotted on price charts as lines. They’re useful in assisting traders to detect market signals and trends.
| Trading strategy | Core characteristics | |
| Trend trading | Used for medium and long-term positions. Tries to find market rises and falls (trends) and adopts long or short positions. Ideal for position and swing trading styles. | |
| Range trading | Used for short and very short-term positions. Traders seek to trade on price oscillations that taking place within known ‘support’ and ‘resistance’ level ranges. Ideal for day and scalping trading. | |
| Breakout trading | Used for short and medium term positions. Prices deviating or ‘breaking out’ from a normal range of fluctuations are used as signals to open positions. Ideal for day and swing trading. | |
| Reversal trading | Can last for varying lengths of time. Based on identifying reversal points in present upward or downward trends. A reversal marks a key turning point in market sentiment. Ideal for position and swing trading. |
Create a trading plan
A trading plan is a comprehensive decision-making tool you’ll use when buying and selling assets. It’s helpful in assisting you to make a decision on what asset to trade, when to do so and how much to spend on this. This plan should be personal to you and must be adapted to factor in your attitude to risk and the amount of capital you have at your disposal.
Start trading on a practice account
You can open a free demo account with us to put your newly acquired trading knowledge to the test. This is a risk-free environment that enables you to cut your teeth into trading using £10,000 worth of virtual funds. Once you’ve gained enough confidence and you’re familiar with trading on the platform, you can decide to upgrade to a live account.
Get into trading by opening your live account
Once you’ve practised trading with a demo account and you feel you’ve refined your trading skills and plan, you can open a live brokerage account with us. You’re under no obligation to deposit funds immediately.
Here’s how to open your live trading account:
- Fill in a form. You’ll be asked about your trading knowledge to ensure you get the best experience
- Get verification. We can usually verify your identity immediately
- Fund your account and start trading. Deposit funds into your account so you can start your trading journey. There's no minimum deposit. You can also withdraw your money whenever you like for free
FAQs
What is trading?
Trading is the buying and selling an asset of your choice – be it indices, shares, forex, cryptocurrencies or commodities – without owning the underlying instrument. You’d trade using Turbo24, spread bets, CFDs or options with us.
How do I start trading?
To start trading, you can open a demo or live account with us, which will give you access to the various markets in the risk-free or live environment, respectfully. Before you take your first position with real money, it’s important to learn as much as possible about trading.
To improve your confidence as a trader, you can practise using the €10,000 virtual funds in the risk-free demo account environment. When you’re ready, you can upgrade to the live account with us.
What risks should I know about before getting into trading?
There are number of risks associated with trading – and one of them is trading with leverage. While Turbo24’s knock-out levels act as a built-in guaranteed stop, spread bets, CFDs and options are also leveraged products – they give you increased exposure to the underlying asset at the fraction of cost. However, any losses you make will be based on the full position size and could exceed your initial deposit – so, it’s vital to take steps to manage your risk properly.
Still, there are a number of risk management tools you can use when trading with us, such as stops (also called stop losses) and limits.
How can I learn more about trading?
You can learn more about trading by taking online courses on IG Academy – for free. Plus, you can make use of articles in the strategy and planning and news and trade ideas sections on our website.
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2 A commission only applies for orders with a notional value below €300.
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