What is CFD

How to trade CFDs with Capital.com

Take basic steps to trade with Capital.com

Capital.com is a CFD broker that enables traders of any experience level to speculate on price changes. Below is our step-by-step process to begin trading CFDs on multiple financial instruments with Capital.com.

 
Getting registered
Investors-to-be should create CFD accounts with Capital.com in one of the available currencies: GBP (£), EUR (€) or USD ($). In order to trade with the CFD provider without restrictions, a prospective investor should successfully complete the registration process and obtain the account status ‘verified’.
 
Making a deposit
Once an account is created, Capital.com’s user needs to fund it in order to start trading. The CFD broker accepts GBP, EUR or USD; deposits can be made via a convenient choice of payment methods.
 
Trading itself
Verified holders of CFD accounts get unrestricted access to more than 500 financial instruments. Traders can speculate on price changes of popular shares, indices, commodities and currency pairs. To take an advantage of market movements, a trader needs to open a position to buy or sell a financial instrument.
 
Withdrawing
Successful trading brings about profit. Knowing that you have it available on demand is essential. With Capital.com, investors can withdraw funds in GBP, EUR or USD and the withdrawal requests are processed within 24 business hours.

Learn the mechanics of trading with Capital.com

Capital.com is an advanced investment app powered by artificial intelligence (AI). Using the CFD trading platform, users can reach multiple financial instruments and take advantage of them via CFD trading.

The CFD provider, Capital.com, offers a wide selection of more than 500 financial instruments, including:

  • Shares: stocks of the largest and most popular companies, such as Apple, Microsoft, Alphabet, Rolls-Royce Holdings, Boeing, Exxon Mobil, etc., that traders can filter by ‘Region’ or ‘Sector’.
  • Commodities: he most traded metals and energy commodities, such as Gold, Silver, Crude and Brent Oil.
  • Indices: the most watched and influential market indices, including the S&P 500, the FTSE 100, the Dow Jones Industrial Average, the DAX 30 and more.
  • Currency pairs: major Forex pairs, the most popular exchange rates, such as EUR/USD, USD/JPY, GBP/USD etc.

To start trading on multiple markets, first an investor needs to download and install the Capital.com app. The trading platform is compatible with iOS and Android-based devices, and is available on the App Store and Google Play.

Once the app has been downloaded and installed, a new investor should register and open a CFD account in GBP, EUR or USD.

To become a verified user, a prospective investor should:

  • fill out a registration form;
  • confirm email;
  • prove his/her identity and address.

It will take some time for the Capital.com’s team to review the documents and check eligibility of a newcomer. This is done to ensure security of an investor’s personal data, as required by the Cyprus Securities and Exchange Commission (CySEC), the regulatory body that Capital.com is subject to. Once the managers make sure everything is right with the documents, they assign the status ‘Verified’ to the new user.

Holders of CFD accounts can deposit funds in one of the following ways:

  • Debit or credit card
  • Bank Wire Transfer
  • Neteller
  • Skrill

However, the very first deposit can only be made using a debit/credit card or Bank Wire Transfer.

Money withdrawal takes no more than 24 business hours and is done using the same payment method as the money was deposited.

Fees. The CFD provider charges no fees or commission for either deposit or withdrawal of funds. However, Capital.com’s bank requires a particular fee when the broker sends payout to the client’s account. Additionally, the client’s credit card issuer may require charges for deposits.

Capital.com doesn’t charge any commission on trading, but makes its profit on spread only. Spread is the difference between the buy and sell price of an instrument. Traders who leave their positions open for more than one day will also have to pay an ‘Overnight Premium’. To find out the rate, examine the instruments’ details section. Overnight premiums differ from instrument to instrument. If you close a position within the same day, you won’t have to pay the premium.

Based on AI. Capital.com is a smart app, powered by Artificial Intelligence. The neural networks at the core of the app offer video, articles, news, analyses, etc. tailored to the trader’s preferences and background. Relevant content is presented in a handy and comprehensive Facebook-like feed.

Moreover, AI solutions will analyse the investor’s trading strategy and identify what behavioural bias they may be subject to. Cognitive biases hamper successful results in trading, thus it’s useful to know what biases you follow and how to avoid them. The app will figure it out for you and recommend some content to further improve your investment skills.

Learn how to trade CFDs

CFD traders can take advantage of leveraged trading. Leverage is the use of borrowed money to get exposure to larger market positions. Capital.com offers a leverage of up to 1:200, which means that the trader is required to have at least 0.05% of the total value of trade available as cash in the trading account. Consequently, investors can trade with more funds than they actually invested, and the profit can significantly exceed the original investments. However, leverage magnifies the losses as well, so investors should carefully manage their risks.

To protect users from losses, the Capital.com app has introduced a Negative Balance Protection feature, which guarantees that the account balance can’t drop below zero.

Before opening a position, it’s vital to study the basics of investing and learn how to trade CFDs. Capital.com’s developers have made sure to take care of novice traders with the release of their educational app called Investmate. The learning tool teaches the ins and outs of finance and trading in a straightforward way, using short lessons of up to 5 minutes and interactive quizzes to track progress. The app provides a comprehensive list of financial terms that a beginner may find useful. A list of terms made easy can also be found on the website version in the ‘Learn’ section.

The financial instruments offered by Capital.com are tied to different global markets and time zones, thus they have different trading hours. They are specific for different instruments and are indicated in the instruments’ details section.

To open a position, an investor needs to choose a financial instrument. Study the news, learn about the latest market predictions and read analyses to find a potentially profitable market. Capital.com’s feed will suggest related content so that you can make a smart investment decision.

Watchlist. The app’s watchlist is divided into two parts. The first part shows the list of instruments. To make the choice simpler, the app suggests handy filters such as Major Indices, Well-known Retailers, Most Admired by Fortune 500, Top Consumer Goods Companies, Popular Tech German Stocks, and more.

The second part of the watchlist shows prices dynamically in the form of real-time charts, that by default demonstrate sell prices.

When a user taps an instrument, they can see a graph, related up-to-date news and, most significantly, the prices to buy or sell the instrument. The first price will always exceed the second one, and the difference between the prices is called the ‘spread’. In addition to choosing the direction of an order (buy or sell), an investor needs to choose the position size. This is the amount of a particular instrument to be bought or sold.

An order to buy means you take a long position, an order to sell — a short one. When a trader instructs a CFD provider to buy or sell an instrument, they open a market order. Market orders are executed at the best available price for the specified instrument size. However, the price of execution can differ from the price you see at the order placement.

Traders can attach Stop Loss and Take Profit orders to their Market Orders. To limit losses when the price moves against you, you can place a Stop Loss, which automatically closes your position when the price reaches the specified threshold. A Take Profit carries out the same function but does so in order to lock in the profit when traders cannot watch their positions all the time by themselves.

Margin closeout. If trading goes wrong and a trader loses funds on their open positions, Capital.com protects them from losing more than initially invested. To keep positions open, a trader needs to meet the maintenance margin requirement. This is the minimum value of funds to be kept in a margin account to cover any credit risks arising during the trading operations. Thus, the value maintained in a margin account serves as collateral for the credit.

Once a trader crosses the specified minimum level, Capital.com notifies them using a ‘margin call’. At this point a trader is required to top up their balance or close some of the open positions, if they choose not to, their positions will be fully closed if the close out level is reached.

Keep in mind that the Capital.com CFD provider offers no financial advice. This is part of its policy as required by the regulatory body — the Cyprus Securities and Exchange Commission (CySEC). However, Capital.com’s investors have access to the most recent and important news via the ‘News’ section. Here they can find analyses, economic news, daily updates, features, etc., that can help them make smarter investment decisions.

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