While contracts for difference (CFDs) can be a great addition to your overall An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset More strategy, you could lose more money than you started with. To protect you from losing more money than you have, some CFD providers offer limited risk accounts. In this video, Simon Brown explains how these accounts limit how many times you can gear your In the world of finance, a "portfolio" is a term to describe all the assets you own. It includes shares, cash, bonds, physical property, your retirement savings, your tax-free savings and any other financial instruments you might hold. It excludes insurance products like life insurance. Your overall portfolio can be made up of a number of portfolios held at different to protect you from losing more money than the deposit you paid to open the position. He also explains how compulsory guaranteed stop losses will get you out of a position before your account goes negative.
Limited risk accounts are a way to learn the ropes of derivatives trading in a financially responsible way. Once you feel comfortable with how CFDs work, understand the risks and the costs involved, you can apply for an ordinary CFD account.
Another way to manage risk in your trading portfolio is to ensure that you have a well thought-out trading plan and risk management strategy. Watch our Boot Camp series for practical tips on implementing a trading strategy.
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