Am just getting used to platform and wanted to understand cfd a little more.
When you place a sell or buy trade … I understand the leverage part, but I don’t understand how it determines how low or how high it goes before it reaches profit.
Sometimes it’s a small amount other times larger… how is this set so I know before making a trade?
Basically, each instrument has 2 prices - a Buy and a Sell price.
- 1.When you place a buy order on an instrument, you open the position by the Buy price. When calculating the same position’s result you need to take into consideration the Sell price.
- 2.Conversely, when you place a sell order on an instrument, you open the position by the Sell price. When calculating the position result you need to take the Buy price.
- 3.The difference between the entry price and the closing price determines if you are at a profit.
- 3.1. For Buy (Long) positions you profit when the closing price is higher than the entry price.
- 3.2. For Sell (Short) positions you profit when the closing price is lower than the entry price.
Both the Buy and the Sell price can be seen in Instrument details. The price of the chart on the mobile app is by default the Sell price and you can switch to the Buy one on the web.