CFD Trading Tips For Limiting Risk With City Index Australia

SYDNEY, Australia, April 17, 2012 /PRNewswire/ --

Trading CFDs with City Index Australia can maximize a trader's market involvement from an initial deposit that is only a small percentage of the total contract value, this allows for easy access to thousands of markets 24-hours a day.

Whilst offering multiple benefits, trading CFDs on leverage can also come with great risk and you may not hold an interest in the underlying asset.

Follow our CFD trading tips to help manage your risk effectively and magnify your potential profits.

Orders

Through CFD provider City Index Australia, you can take advantage of helpful risk management tools.

When placing a trade, it is important to consider applying a stop loss order.

You can choose between a Standard and Guaranteed Stop Loss Order (GSLO). The latter offers you the greatest protection, particularly at times of market gapping and slippage, making it the most effective risk management tool available.

A GSLO closes out a position at a trigger value set by you, regardless of the aforementioned gapping or slippage occurring. For this service, you do incur a small charge.

Let us look at an example using the Rio Tinto CFD.

Say you buy 200 Rio Tinto CFDs at $62, and highlight $58 as your maximum loss level.

It will cost you a premium of $37.20 to place the GSLO.

Should Rio Tinto reach $58, the City Index Australia systems will automatically close out your trade at this level, to prevent you from incurring any further losses. So, for example, if negative copper production figures push Rio Tinto lower to $56, you needn't worry as the City Index Australia systems have automatically closed your position out at $58.

CFD Trading Strategy: Analyse

1 2 Next › Last »