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In this section we introduce our trading platform and illustrate the ease with which you can trade CFDs on a wide range of markets. We also cover features such as stops and limits and explain how trading with leverage works.
|Direct market access||Orders - stops and limits||Leverage and margin|
|Introduction to DMABenefits of DMADMA platformsDMA platform examples||Types of ordersAttaching a stopStop orders to openTrailing stopsSlippageGuaranteed stops to openOrder timeframes||Trading using leverageMargin requirementsMargin with guaranteed stopsMargin with non-guaranteed stops|
There are different types of orders you can place, depending on whether you want to trade immediately or wait for a certain price.
The main types of order you’re likely to use regularly are stops and limits.
For example, let’s say the FTSE 100 is trading at 6000 and you leave an order to sell at 5890. This is a stop, as selling at 5890 is a worse (less favourable) level than the current price of 6000.
On the other hand, if the FTSE 100 is trading at 6000 and you leave an order to sell at 6110, this is a limit, as selling at 6110 is a better (more favourable) level than the current price of 6000.
To find out about stops and limits in more detail, please visit our orders, stops and limits section.
Let’s imagine that you already have an open position, long one contract on Wall Street at 10,856. The position will be displayed in the ‘open positions’ panel in our trading platform. The dashes in the stop and limit columns show that the position currently has no stop or limit attached.
You decide to attach a stop order to your position, to close it if the price moves against you. This is also known as a stop-loss. To do this, click on the dash in the stop column.
This will open a ticket that’s already populated with your position’s details.
You enter your chosen stop level of 10,800 in the stop level box.
If you wanted, you could also add a limit level to close out if the market price increases to a specified level. Just remember that your chosen level will need to be at least a specified minimum distance from the current price.
Click submit and a message will pop up letting you know your order has been accepted. You can now see your order in the open positions window.
You might decide that you want to open a position if the market hits a certain level. This could be because your chart pattern analysis suggests that a market will move in a certain way if it breaks a particular level. Instead of having to constantly watch the market, you can set a stop or limit to open a position if your conditions are met. This is also known as a working order.
Trailing stops are simply stop orders which automatically follow positive movements in the market, maintaining your chosen stop distance and helping you to secure the gains produced by the market movement.
To make trailing stops available, you’ll need to go into ‘Preferences’ in the ‘my account’ section of our trading platform. A ‘trailing’ tick box will then appear in the ‘stops and limits’ section of future deal tickets.
Trailing stops are only available as non-guaranteed stops.
How to place a trailing stop in OUR TRADING PLATFORM
Sometimes, due to market factors, you might not get the exact price at which you intended to trade, but a less favourable price instead – even with a non-guaranteed stop. The difference in points between your desired price and the price that you deal on is called the amount of slippage.
The following factors can cause slippage:
Let’s say you are long one contract of Wall Street at 11,100. You decide you want to place a stop order to close the trade (sell) if the market moves against you. So, you place a non-guaranteed stop at 11,020.
The market moves against you as Wall Street drops to 11,050, but you decide to hold your position a little longer.
The next day, disappointing economic data causes markets to drop further and our Wall Street price falls quickly below your stop level. You can see by the table on the right how quickly markets can move, so it’s good that you had a stop in place.
Our Wall Street price
You can see that our bid price hits your chosen stop level of 11,020 at 16:27:33 (underlined). This is when your stop order is triggered, but it’s executed at the next available price of 11,019 at 16:27:34 (green). You have paid 1 point in slippage, but are protected from the rest of the price drop.
Guaranteed stops come at a small premium, which is charged only if the stop is triggered, but are not affected by slippage. To place one:
When setting an order, you need to decide how long you want the order to stay working for. You might want the order to last for a few hours, a day, or indefinitely.
Orders will either be GTC (good till cancelled) or good till a specified time.
The default setting is ‘good till cancelled’ which means that the order will stay open until 1) you cancel it, 2) the order is filled, or 3) the period for that market expires (in the case of forward contracts).
If you want your stop or limit order to expire if your target level isn’t met before a given point, you’ll need to enter an expiry date and time.