Understand the risks involved
Contracts for Difference (CFDs) are leveraged financial derivative products that allow traders to speculate on the rising or falling prices of global financial markets, such as shares, indices, commodities without owning the underlying product. Due to the high risk nature of leveraged financial products, it is possible that losses can exceed your initial deposit.
At LCG we place a strong emphasis on education, to help you understand the risks involved and help you make informed trading decisions.
If you are new to trading you have the option to open an LCG demo account to learn the basics and practice trading risk-free.
CFDs are a leveraged product, meaning you can gain exposure to the markets by depositing just a percentage of the full value of the trade you wish to place.
However, leverage works both ways. This means that while you could make a potential profit if the market moves in your favour, if the market moves against you, your losses can be magnified and you could just as easily lose more than your deposit.
If you are new to trading leveraged products you have the option to open a free LCG demo account to accustom yourself to the prospect of leveraged trading.
Effective use of risk management
Proper risk management is essential to trading. Whether you are new to trading or an experienced trader, the importance of risk management should not be underestimated. Below are some important factors to consider when it comes to risk and money management:
When trading CFDs with LCG, you have access to a full range of risk management tools. This may assist you to effectively manage your risk exposure and cap your losses, before you have even placed the actual trade.