CFD Trading - Managing Your Risk

SINGAPORE, June 22, 2012 /PRNewswire/ --

CFD trading with City Index Asia allows traders access to a vast range of markets, thus giving them the chance to maximise their market participation with exposure to many of the financial instruments available.

With the low margin feature, traders can pay only a small fraction of the total trade value as a deposit.

The CFD trading guide below aims to help new and experienced traders to better manage their risk.

Trading Strategy

Before placing a trade, traders should develop a comprehensive trading strategy. A trading strategy should aim to outline where you want to take profits and where you are willing to take a loss.

Apply an Order

When your strategy is in place you can put in place a stop loss and limit order.

Your risk can be reduced significantly by fixing your stop loss to your loss target and having a limit order as your profit target. Then you can reduce the level of stress that comes naturally with trading.

A guaranteed stop loss is an order to close out a position at a prearranged level that you choose. It offers you the protection of maximum loss that you can incur; particularly when or if a market gap occurs.

This protection does incur a small charge, which can vary across different markets.

Knowledge is Power

Understanding your market is essential to your trading success and limiting your risk.

By analysing your market's price movement, you can start to learn what affects it, where underlying volatility may occur and forthcoming announcements that may impact its price.

Using this knowledge, you have the power to react more quickly and accurately when news emerges and the market moves.

Start Trading CFDs with City Index Asia

Investors that choose to trade CFDs with City Index Asia have access to many features that can help them to better manage their risk whilst trading a wide range of financial markets.

It would be advised to begin trading with a demo trading account before you start trading the financial markets through a live trading account.

Start trading CFDs through a demo trading account today.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

City Index is a leading global provider of leveraged foreign exchange trading, CFD trading and in the UK, spread betting. As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. To learn more visit: http://www.cityindex.com.sg/

SOURCE City Index Asia