Plus500 user manual
Did you just create a Plus500 (demo) account as well? Then you’ll want to know how to trade successfully at Plus500! In this tutorial we will show you how to use the tradingplatform of Plus500 and we look at the variety of opportunities this broker provides.
Creating an account
If you have not yet opened an account with Plus500 you can do so here for free. To open a demo account you just have to fill in an email address and a password. Only when you’re going to trade with real money should you provide more personal data.
As of March 2017, Plus500 is no longer allowed to offer welcome bonuses to new clients. CySEC, the Cypriot regulator, has recently decided to restrict the offering of bonuses to clients. According to this new restriction, offering bonuses to CFD traders is no longer allowed.
How does trading with a CFD broker work?
Before we delve into the specific software of Plus500 I’d like to briefly explain how CFD trading actually works. It is important to know that when you buy CFDs, you do so not to hold them for a long period, but only for days or weeks. For CFD trading the volatility in the short to medium term plays an important role.
When trade at Plus500, you can make money regardless the movement of the market. Because you can go long (buy) when you think the price will rise and you can go short (sell) when you think the price is going to drop.
Another major advantage of a broker like Plus500 is the fact that they provide trading through leverage. Because of leverage you can open positions of up to 300 times your deposit without the risk of losing more than your initial deposit. For example, if you start trading with an amount of 1,000 Euros you can buy stocks, Forex, or indices for up to 300,000 Euros (with a leverage of 300)! The difference in opening and closing price of the trade will ultimately determine your profit or loss.
Opening your first position at Plus500
The opening of a position is the beginning of a trade. This is quite easy at Plus500. Within the software you just need to find the instrument you wish to trade. For example, if you want to buy Google shares, you look for the category “stocks, USA”. There you will find the share Google and you just need to press the button “Sell” or “Buy”.
You’ll probably notice that there is a difference between the buying and selling price, this difference is also known as the spread. The spread is the profit of the broker and is in case of the currency pair EUR / USD 1 pip, or several thousandths of a percent. Because brokers perform millions of transactions per day, they can still make profit despite these minimal transaction costs.
Limiting losses and maximizing profits
When you start trading you’ll want to make a profit, therefore it is (obviously) important to ensure that your profits are larger than your losses. Two options are built into the software of Plus500 to make things easier: the so-called stop loss and take profit. The stop loss allows you to choose a certain price level at which the position is to be closed automatically. With the take profit you automatically close a position once a certain profit is made.
In addition to using a stop loss and take profit you can also place orders. An order allows you to automatically open a position at a specific price. That way you can thus open a position at a certain price from which you think the price is going to move in a specific direction; that way you can partially automate your trades and achieve better results.
Nevertheless, it is important to remember that the difference between the opening and closing price will determine your eventual profit or loss. Only when you close the trade your profit or loss is actually realized. However, your loss may not exceed your account balance because then your position will be closed because of a margin call.
The basics of trading with Plus500 are pretty simple. The opening and closing of positions is a piece of cake and the graphs are easy to read. Yet many people will have to get used to it in the beginning. It is thus recommended to start with a free demo account. When you feel comfortable, you can decide to make a deposit and start trading with real money.
If you have any questions about the Plus500 software or about trading in general? Please contact us or post a message on Facebook or Twitter and we’ll answer as soon as possible.