Trading College 

Frequently Asked Questions

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Should I Day or Swing Trade? brokers

Whether you choose to Day or Swing Trade may depend on your current time commitments. Day trading may suit those who can spend more time during the day at their screens or focusing on opening and closing trades within the day. Swing trading may be more suitable for trading at a slower pace than this. 

What is Swing Trading? placing trades

When you expect to hold trades to completion anywhere from a couple of days to a few months.

What is Day Trading? placing trades

When you place and complete trades within a single day's trading.

What is Trading? placing trades

The buying and selling of financial assets in the hope of making a profit.

What is a Broker? brokers placing trades

Brokers are companies who act as intermediaries between the individual investor and the market they want to trade.

What is Spread Betting? placing trades

A form of trading where a bet is placed on the future change of price of a financial market rather than having to buy the underlying asset. The profits are tax-free and the broker makes their profits on the spread.

What is Margin in Spread Betting? placing trades

The deposit needed to open a trade. As Spread Betting is a Leveraged product the Margin is the price you would need to cover if a trade went against you and you had not placed a Stop Loss Limit in the market.

What is Leverage in Trading? placing trades

Leverage is a mechanism offered by brokers where you effectively borrow funds from the broker in order to increase the position you are able to trade beyond what your account size would offer otherwise.

What are Futures, Options, CFDs, Turbo24s and Spread Betting? placing trades

These are all different types of trading. Each has their own levels of leverage and risk. It is important to research different trading options to discover which one will work best for you.

What are the different ways to place a trade? placing trades

Trades can be placed directly through the charts, through the broker's website and through the broker's app.

What is a Stop Loss? placing trades

A Stop Loss is an order level placed in the market that tells the broker to buy or sell your position once this price is reached to take you out of the position. The three types of Stop Loss Orders are: Normal, Guaranteed & Trailing.

What is a Profit Target? placing trades

A Profit Target is the price level that you are targeting to take your profits and exit the trade. A Limit Order can be placed with the broker telling them to buy or sell your position at this price to take you out of the trade at your Profit Target.

Where should I place a Stop Loss Order? placing trades

The price level you place a Stop Loss is dependent on the strategy your are using. Each strategy has it's own defined stop loss placement. Examples include behind major Moving Averages or previous pivot high/low.

Where should I place a Profit Target? placing trades

The price level you place a Profit Target is dependent on the strategy your are using. Each strategy has it's own defined Profit Target placement. Examples include support/resistance area and u- or n-shaped targets.

What is meant by Position Size? How do I calculate my Position Size? placing trades

Stop Loss Orders are an important tool of Risk Management and are calculated as follows: Stop distance (in pips/points) / Amount to be risked (£) 

What is an Order? placing trades

A price level where you have place an order with the broker instructing them to buy or sell.

What is the difference between trading at market level or market order? placing trades

When trading at the market level you enter the trade at the current market price. An order trade can be placed to be filled at a different price level specified by the trader.

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