Your capital is at risk
When working on margin, both the profits and losses are magnified. Without a stop loss, it is easy to use up your margin very quickly. If you don't set a stop-loss you can suffer big losses, if your position turns on you. So the best is to work with a guaranteed stop.
In Plus500 your positions are automatically closed when your margin gets too low. With the Plus500 trading platform, it is impossible to loose more than the invested amount, and with Plus500 customers cannot run up debts.
CFDs are not suitable for long-term investors, who, for example, want to keep shares for a few years. If you keep a CFD open for a period of more than 6 months, the financing costs (the premium) go up, and it would be better to buy the underlying assets directly.
The value of CFDs fluctuates very quickly and therefore they are not suitable for an investor who wants to get a guaranteed income from his investments.
Never trade with money that you cannot do without. Because of the leverage effect, small fluctuations can still mean big losses. You would risk to loose your entire investment.
Start trading with small amounts of money and do not use the leverage at the maximum! Only use a small part of your account as margin. If you trade with a high leverage and invest almost your entire account on margin, a badly estimated position can quickly turn on you. A large part of your margin can vanish as frost under the morning sun.
Before trading with real money, learn to trade with a free demo. You get a fictitious capital and become familiar with the trading platform. This way you also learn to work with the lever effect.
A CFD is a contract between you and your broker, so the counter party risk is with your broker.
Among others, IG and Plus500 are regulated by the Financial Conduct Authority (FCA) in England.
CFDs are a leveraged product. Make sure you understand all the risks involved.
