What are the risks?

There are certain risks associated with trading on the financial markets – learn how to manage them with our range of tools and resources.

Watch our five-step video guide to managing risk, or see below for more details on limiting your exposure.

CFDs carry risk in the same way that any financial product carries risk – if the market moves against you, you lose money. However, the risks associated with CFDs can be greater because they are leveraged products.

What is leverage?

Leverage enables you to gain a large exposure to a financial market while only tying up a relatively small amount of your capital. In this way, leverage magnifies the scope for both gains and losses. 

Is leveraged trading risky?

Even though you only put up a relatively small amount of capital to open a position, your profit or loss is based on the full value of the position.

Therefore, the amount you gain or lose could be relatively large compared to your initial outlay.

Learn more about leverage

What can I do to control my exposure to risk?

  • Develop a trading plan, and stick to it

    A trading plan can help you clearly define and achieve your overall financial trading goals.

    Our education section offers advice on how to define and adhere to a personal trading plan.

  • Start slowly, and build your skills and expertise

    If you’re new to leveraged products, you can get used to how leverage works by trading in small sizes while you develop your understanding.

    New clients can trade at reduced minimum trade sizes for two weeks and reduced commissions for six weeks with our introduction programme.

  • Understand the markets you want to trade on

    Ensure you understand the factors that influence different markets so you can base your trading strategies on the most relevant information.

    Our trading skills section covers each market we offer in great depth, and our experts provide regular data and commentaries in news and analysis.

  • Monitor your open positions

    Ideally you’d be able to constantly monitor your open positions and react to market movements. Practically, however, this is often difficult.

    Our platform is available via our free app, so you can monitor trades on your mobile or tablet. You can also set up price alerts to notify you when specific prices are reached.

  • Use stops and limits to protect against sudden market movements

    Sudden market movements can cost you if you aren’t able to react immediately. Automated risk management tools can save you time and money.

    Our risk management tools protect you from sudden market movements and let you lock in profits when the market moves in your favour.

    These include stop losses, guaranteed stops, trailing stops and limit orders.

  • Keep learning

    Improve your success rate by learning more about the markets you’re trading on and exploring new trading strategies.

    Build your knowledge and expertise with our comprehensive Trading skills section, get an aggregated view of how IG clients are trading, and hone your skills with a free demo account.

Open an account now

There's no minimum balance to open an account, it takes less than five minutes, and there's no obligation to fund or trade.

Create account

Or try our platform first with a free demo account

You might be interested in...

  • Risk management

    Protect profits and limit losses with our range of risk management tools.

  • Learn about IG

    See how we've been changing the face of trading for more than 40 years.

  • Fund security

    All client money is held in segregated trust accounts in accordance with ASIC's client money protection rules

Contact us

We're here 24hrs a day Monday to Friday.

1800 601 734

You can also call +61 (3) 9860 1734, email helpdesk.au@ig.com or tweet us at @IGHelpAU