Trading College
Frequently Asked Questions
(Beta)
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.
When you expect to hold trades to completion anywhere from a couple of days to a few months.
Brokers are companies who act as intermediaries between the individual investor and the market they want to trade.
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.
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.
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.
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.
Trades can be placed directly through the charts, through the broker's website and through the broker's app.
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.
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.
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.
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.
Stop Loss Orders are an important tool of Risk Management and are calculated as follows: Stop distance (in pips/points) / Amount to be risked (£)
A price level where you have place an order with the broker instructing them to buy or sell.
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.