CFD Essentials · 16 Oct · 6 min read
What Is a Trailing Stop and When Does It Help?
A trailing stop moves with the price in your favor and stays put when it turns, locking in gains. How it works, a worked example and when it helps or hurts.
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How to Set a Take-Profit Level That Fits the Trade
Define the stop first, find a realistic target, check reward to risk and adjust for costs: how to set a take-profit level that fits the trade, with an example.
What Is a CFD and How Does CFD Trading Work?
A CFD is a contract to exchange the difference in an asset's price between opening and closing a trade. How CFDs work, what they cost and why most lose.
Why Prices Gap Over Weekends and What It Means for Open Positions
Markets close for the weekend but news does not, so prices can reopen far from Friday's close. Why gaps happen, how they hit stops and margin, how to manage.
How Stop-Loss Orders Work and Why They Can Slip
A stop-loss closes a trade at your level but fills at the next available price, which can be far worse in a gap. How stops work, slippage and guaranteed stops.
How Short Selling Works With CFDs
With a CFD you can sell first and profit if the price falls, without borrowing shares. How short positions work, what they cost and why losses are open-ended.
How to Calculate Overnight Financing Before Holding a Trade
Daily CFD financing = position value × (benchmark ± fee) ÷ 365. Worked examples for long and short index positions, a 30-day hold and forex swaps.
What Is Negative Balance Protection?
Negative balance protection limits a retail trader's losses to the money in the account. Where it applies, how it works and what the 2015 franc shock showed.
What Happens in a Margin Call and a Stop-Out?
A margin call warns your account is near its limit; a stop-out is when positions are closed. Thresholds, a worked example and how to avoid both.
What Is Leverage in CFD Trading?
Leverage lets you control a larger CFD position with a smaller deposit, magnifying gains and losses. How leverage ratios work, an example and the limits.
How CFD Prices Track the Underlying Market
CFD prices come from the underlying market plus a spread. How cash and futures-based CFDs are priced, and why prices can differ from the exchange.
Equity, Free Margin and Margin Level Explained
Equity is balance plus open profit or loss; free margin is what is left after used margin; margin level is equity ÷ used margin. Formulas and an example.