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Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 Tutorial: How to open and close a trade in Plus500

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Plus500 Tutorial: How to open and close a trade in Plus500

Opening and closing a trade is simple in Plus500. A trader with a Plus500 account can trade CFDs on Forex, Stocks, Commodities , Options and Indices.

Below I will explain to you how to do this and what the options mean that you see during opening a position.

Contents

  1. Finding an instrument that you want to invest in
  2. Difference between short and buy
  3. Stock information screen explained
  4. Short and buy screen explained

 

Finding an instrument that you want to invest in

  1. Login to your Plus500 account via the webtrader. Create an new account if you haven’t done it yet.
  2. Click on ‘Real Money’.
  3. Login and in the menu at the left side of the page, click on ‘Trade’. Here a list of all tradeable instruments can be seen. Now Plus500 is one of the few online CFD brokers who has that many instruments, so you can trade stocks, commodities, indices and forex from all across the world.
  4. Now for the sake of learning, let’s say you want to trade in the USA stocks  of Apple (iPhone, iPads anyone?). You now go to: Trade -> Shares -> USA -> AN-AW and find Apple in the list. You could also just search for ‘Apple’ in the search field at the top left corner, next to the Plus 500 logo.
  5. Openandclose1When you click on the Apple row, information about that specific stock is displayed on the right. In the next section I will explain to you what this all means.
  6. For now, important to know is what the difference between short and buy is.

 

Difference between short and buy

In the screenshot above you must have noticed two options: short and buy. For the people who know a bit more about trading, simply put this is the same as going bear and bull. Whereas short is the same as going bear and buy is the same as going bull.

For the people who don’t know what I’m talking about:

Going short means you anticipate that the stock will go down. Let’s say you short a stock at £20 and tomorrow the stock value becomes £15. You will have made a profit of £5.

Buying a stock means you anticipate the exact opposite. You think the stock is going well, so the stock will increase. Let’s say you buy a stock at £20 and tomorrow the stock value becomes £25. Your profit is £5.

Of course these are just examples, if you are using Plus500 you’ll also get leverage and your profit (or loss) will most likely be a lot more.

 

Stock information screen explained

When you click on an instrument in Plus500 you will be displayed a screen with information about that instrument. Let’s take Apple for example again. Look at the screenshot below. I clicked on Apple and information about that stock is displayed on the right now. Plus500 gives a couple of important information here, which I will explain in detail below.

Openandclose2

The first thing you see is the title: Apple (AAPL) this is the stock you selected. Between the brackets the stock symbol is shown. This is the stock acronym that is used worldwide to identify that stock. Sometimes a stock name can be a lot a like, looking for that stock with the unique symbol makes it a lot easier to find that stock.

Next you’ll see pricing information of this stock. The current high and low values are shown here. This is taken right out of the Yahoo! Finance page. You can also see how much the price has changed in percentage in comparison with the opening value of that day. When the stock market is closed, you’ll see the line ‘Trading is closed’.

The line ‘Traded at the Nasdaq Yahoo! Finance’ just tells you where the stock belongs and where you can find it on Yahoo! Finance. Nasdaq the second-largest American stock exchange, usually consists of a lot of technical companies.

Next there are two buttons available. Short and buy and below this the value of the stock that you will short or buy. You see a little difference here. This is called the spread, the spread is what you pay to the broker as a commission. This usually is not a lot, depending on the stock’s popularity and value. Be careful with this, because to profit you need to make more money than you pay in the spread. When opening a stock I suggest you to try it in demo mode, to see how much the spread is exactly.

In the last section there is some more information available. If you don’t see it, click on ‘Info’ to uncollapse this information. I will explain to you the most important information:

Leverage: this is not the same everywhere. It usually is 1:10, but in Forex it usually is 1:100. Leverage is a way to make your money worth more than it is. Let’s say you want to use £100. A leverage of 1:10 means your £100 is worth £100 * 10 = £1000. This means with only £100, you can buy stocks that is worth a £1000. Yes, this means you can make 10 times more profit, but this also means you could lose 10 times faster. This last thing sounds scary, but Plus500 gives us a negative balance protection. This means you cannot lose more than your deposit. This means that if you deposited £100, you can profit from £1 to £99999 (infinite) and only lose a maximum of your deposit £100! In my opinion this is awesome.

A more detailed explanation about CFD stocks and leverage can be found here.

Premium: If you keep a position open overnight, a night premium is added or substracted from your position. This means you pay a small amount of money overnight (or you gain it). This is very low usually, so I don’t pay much attention to it. As you can see Apple’s overnight buy premium is -0.0093% of your position.

Premium time: This is the time that the premium is done. I almost always keep my position open for a night and I have never really noticed premium much.

Maintenance margin: This is important information, because if your position goes below this margin your position will be automatically closed. So to keep your positon open, your current account balance needs to exceed this margin. Thankfully, this isn’t much either. I usually deposit £100 and use that £100 completely in a position and this position can be kept overnight without it autoclosing on me. If you open a position, this margin will also be automatically calculated for you in the top header (look for M. Margin) – so you don’t even have to calculate this yourself.

Expires daily/expiry date: I have never noticed this much. I don’t think this applies to stock, but might apply to something else. Just make sure to check if this is ‘No’.

Trading hours: This is important to know. Plus500 automatically changes this time to your timezone. An American stock is usually open from 9.30 am to 4 pm American time, but the time shown here is in your own time. Which is great and makes it so much easier to time your trades well.

Now you understand the information screen. The next screen to explain is the screen when you want to open a position.

 

Short and buy screen explained

Now let’s say you want to buy Apple. Click on the Buy button. This is what you will see now:

Openandclose3

The short screen has the same information, so I will explain this only once.

The Plus500 short and buy screen is very nicely done with the user in mind. It gives great information and makes it easy to open a trade. The first thing you see is the stock name and symbol. The current value and the percentage of movement since the opening time.

Now to open a position you need to decide how many shares you want to buy. Let’s say here youw ant to buy 5 shares. The value of this 522 dollar, which is the same as 488,59 euro. Plus500 automatically takes the foreign exchange price of your currency and the one the stock is using, which usually are dollars. This is great, you don’t really have to pay much attention to this. Also, because Plus500 is giving you leverage of 1:10 of this stock, you only need 55 dollar to buy 5 shares that is valued 522 dollar. Amazing right?

So really you only need to pay attention to the ‘Required Margin’. This is the amount that will be substracted from your account to use in the position. So not the value, but the required margin. This is important.

Next you have ‘Close at profit’ and ‘Close at loss’. These options give you the ability to let Plus500 automatically close your position when the stock value reaches a certain value that you set. This is great if you don’t have the time to close it yourself and want to let it happen. Also, if you are losing this guarantees a certain loss. So instead of losing your whole position, you only lose what you want. Or the opposite: profit what you want.

Guaranteed stop sets an absolute limit on your potential loss. The position will be closed at the value you specified, even if the market gaps suddenly, your position will be closed at the value you specified.

The advanced section I will explain in a later article.

Below this section, the information I explained earlier is displayed again for your convenience.

When you are ready, just click on the big blue button ‘Buy’ and your position will be opened. This position will be shown in the left menu at ‘Open positions’. Or in the stock list, under the stock itself.

Don’t forget, to truly learn how to trade, you need to try it yourself for a couple of times to be able to get the hang of it. Try it out with small amounts of real money first to feel how you react to profits or losses. This is important to know of yourself prior to trading.

*How to buy and sell bitcoin on Plus500*

*How to buy and sell Ethereum on PLus500*

 

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The topics below are coming soon:

  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 Tutorial: Deposit and withdrawing money

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Plus500 Tutorial: How to deposit and withdraw money in your account

Depositing and withdrawing money is simple and a fast process with Plus500.

Contents

  1. Depositing money
  2. Withdrawing money
    2.1 Withdrawal status

 

Depositing money

  1. Login to your Plus500 account via the webtrader. Create an new account if you haven’t done it yet.
  2. Click on ‘Real Money’.
  3. Login and in the menu at the left side of the page, click on ‘Funds’ -> ‘Deposit’.Deposit1
  4. Choose your preferred money transfer method. All methods are deposited immediately, except for wire transfer which takes 1-3 business days. Important note: when using a creditcard Plus500 asks you for additional verification documents, which are just a copy of the front and back of your creditcard with your name visible. This process might take 5 minutes up to 24 hours, so take this into account! After doing this, the next time you deposit with your creditcard, the money will be deposited immediately. aa
  5. After finishing your familiar money transfer method, your deposit will be shown immediately on the top header of the webtrader. Try opening a position immediately!

 

Withdrawing money

  1. Login to the webtrader. Choose ‘Real Money’.
  2. In the menu at the top left. Click on ‘Funds’ -> ‘Withdraw’.
  3. You can only withdraw your money via wire transfer. You need your IBAN + Swift and UK accounts will also need their Sort Code. If you don’t know this, ask your bank or visit your bank’s website. The Sort Code is usually your branch number.
  4. After filling out your details, just click on ‘Open a Withdrawal’.Withdraw1
  5. All done! Withdrawing money takes up to 5-6 business days before it’s shown in your bank account. I have noticed that at some days it could even be in your bank account in 3 business days.

 Withdrawal status

  1. To see your withdrawal status. Go to ‘Funds’ -> ‘Monetary History’.
  2. On the third column you can see the status of your withdrawal. I noticed that if the cancellation button is still here, the withdrawal has not been checked or processed yet. When this button disappears, your withdrawal is being checked. After approval your withdrawal status changes to: ‘Approved, not sent’. When this is changed to ‘Approved, sent’, your money is already underway to your bank account and your money is definitely coming in 1-2 business days.Withdraw2In this screenshot I don’t have any withdrawals yet as I have created a new account so I could make this tutorial. 

Go back to:

The topics below are coming soon:

  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 Tutorial: Using the Software

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This section covers the following topics while using the Plus500 software. We will start with how to open and verify your Plus500 account using the software, scroll down to view the steps. If you’ve already done this, feel free to skip to the next topics.

The topics below are coming soon:

  • How to get free bonus money?
  • How to deposit and withdraw money in your account
  • How to open and close a trade in Plus500
  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

 

How to open an account using the Plus500 software

Software download link: www.plus500.com.

Downloading and installing the Plus500 software is easy. Just follow these steps.

  1. First, open the link: www.plus500.com.
  2. Then click on “Download our Windows trader”. Or download from a direct link (and you can skip to point 5).
    1
  3. The next screen appears. Click on Download Now!
    2
  4. Now your download will start and depending on what browser you use, you can start it immediately.

    Internet Explorer
    IE
    Google Chrome
    Chrome
    Firefox
    FF
  5. Execute the downloaded file, Plus500 will now install on your computer immediately. Wait for this process to finish.
    3
  6. Plus500 will then automatically start up and you’ll see the following screen.
  7. Since you don’t have an account yet, click on New User.
    4
  8. Fill in your email address and password.
  9. Click submit.
    5
  10. You will be automatically redirected to a welcome page of Plus500. You can close this page and continue on the Plus500 software. 6

    How to get a verified account?

  11. Here a few steps are required to create a fully approved account. Click on Funds Management for this.
    7
  12. Plus500 will now ask you a few mandatory questions. Fill everything in, then click Done.
    8
  13. Plus500 will start processing your information, wait for it to finish.9
  14. You are now redirected to new screen, here you will have to upload your ID, which is a copy of your passport, ID card or driving licence. Click on Upload to find a copy of your ID.
    Tip: Take a photo of your ID with your mobile phone and email it to yourself.
    10
  15. Once you’ve selected a copy of your ID, wait for the upload to finish.
    11
  16. Once uploaded, you’ll get this message: “Your uploaded files are currently being reviewed – this process is usually completed within several minutes.” Dismiss this message by clicking Ok.
    12
  17. In the next screen you can see that your copy of ID is now under review. Once this message changes to Verified, you’re good. Close this screen.
    13
  18. There is also another document that you need to upload to fully verify your account and to be able to start trading. Click on Funds Management again.
  19. Now click on Verify Account.
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  20. You’ll see that your ID is already uploaded, what’s missing is a proof of residence. This can be a photocopy of an entire utility bill or bank statement. The only obligation is that your name, address is on it and that the document isn’t older than 6 months. Click on Upload once you have one. Wait for the upload to finish. Your Address section will now also be Under Review.
  21. In the next screen you can see my Verified account. I have also verified my email address which is easy to do. You don’t need to verify your phone number. Once you get this one, you’re ready to go!
    15

Congratulations! You can now start trading with real money using the software.

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Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 Tutorial: Using The Webtrader

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You have chosen to use the webtrader as your main platform for trading with Plus500. You can always switch and use another platform later, as your account is kept cross-platform. Below are the topics that we will cover while using the webtrader.

The topics below are coming soon:

  • How to open and close a trade in Plus500
  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

 

How to open an account using the webtrader

First of all, I will explain how to open an account using the webtrader.

001

  • Choose “Switch to real money” on the upper right corner (see screenshot at 1).
  • Click on “New user? Sign up now!” at the bottom right corner (2).
  • Fill in your details and click on “Create Account” (3).

002

How to get your account verified

  • To get a verified account and to start trading right away with money, first click on “Funds” in the menu. Then fill in your details, enter the questionnaire questions and finish.

003

  • Afterwards, you will be redirected to the “Verify Account” page. Where you need to upload your ID and proof of address. You can also verify your phone number and e-mail address for extra free bonus money.

004

  • To verify your documents, simply click on the “Verify” button and upload the documents. Afterwards, Plus500 will check your documents – usually within 5 minutes. Once checked, you’ll see that your account is now verified.

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  • Congratulations! You can now start trading with real money.

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Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 tutorial: How to use the CFD broker Plus500

Plus500 Tutorial - How to use the CFD broker Plus500

Plus500 Tutorial – How to use the CFD broker Plus500

What to expect in this Plus500 tutorial

Plus500 is an online broker with an easy accessible platform, where you can trade CFD stocks / shares, Forex, Indices, Commodities, ETFs and also Options. The Plus500 trading platform is a powerful CFD trading tool that let’s you trade the world’s most popular financial instruments at just one place. You can open an account in just 5 minutes. So let’s get started with this Plus500 tutorial.

Contents

Webtrader

The topics below are coming soon in the Plus500 tutorial:

  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

Software

Mobile app (coming soon)

  • How to open an account in Plus500 with the mobile app
  • How to verify an account with Plus500
  • How to deposit and withdraw money in your account
  • How to open and close a trade in Plus500
  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500 for trading stocks?
  • Important things to know when trading with Plus500

 

Why have I chosen Plus500?

Plus500 is in my opinion one of the easiest and most reliable platforms that you can trade with and I have tested a lot of online brokers. In this article I will explain to you in detail on how to open an account in Plus500 and also on how to use it. Read our Plus500 review about them to see more reasons.

This tutorial is divided into three sections. Each section covers one of the Plus500 platforms:

Each section consists of the topics that were stated above. The steps are similar, but the buttons and areas to click could be on a different spot, so the screenshot per section will be different.

First of all, decide on which platform you want to use

So the first question is important, how do I open an account in Plus500? Thankfully, opening an account is easy, but there are a couple of steps that you have to take.

First of all, decide on how you want to trade.

  • Using the software: If you’d like to download the software and install it on your computer, go to the following link and click on download now:
    //www.plus500.com/StartTrading.aspx

    The advantage of downloading and installing the software is that it is more reliable, as it has a better response time when you install the software compared to using the webtrader. A swifter response time can help in limiting losses, but it really depends on how you trade.
  • Using the mobile app: If you’re on the road a lot, the mobile app could be your best option. It has a slighty different interface, but is as quick and fast as the software. I personally love the app as it makes it possible for me to trade anywhere I want where I have an internet connection. To download the app, just look for Plus500 in your app store.

Once decided, go to your chosen platform to continue this tutorial:

Software

The topics below are coming soon in the Plus500 tutorial:

  • How to deposit and withdraw money in your account
  • How to open and close a trade in Plus500
  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

Mobile app (coming soon)

  • How to open an account in Plus500 with the mobile app
  • How to verify an account with Plus500
  • How to deposit and withdraw money in your account
  • How to open and close a trade in Plus500
  • Plus500 trading methods and tactics
  • What are the benefits and disadvantages of Plus500?
  • Important things to know when trading with Plus500

Find out here on how to make money with CFD Trading : Make money on simple way with CFD Trading

 

What does Plus500 do with my money?

Ever wanted to make money whenever and wherever you want? Start trading now and receive a 25 dollar welcome bonus

Plus500 money care

Transparency is important when it comes to investing your money. When you are depositing your money into an online brokers account that could be scary, because the risk of losing it is present. This article is to show you what our reviewed online brokers do with your money. By making this process transparent, you should find it a lot less scary to invest your money.

Before investing any of your money you should always follow a couple of simple rules. Ask yourself these questions:

  • Is your online broker licensed and regulated?
  • Does your online broker comply with the FCA rules and regulations?
  • Does your online broker have negative balance protection?


Making Plus500 transparent

We have researched Plus500 before opening our own accounts here and to answer the above questions about Plus500.

Yes, Plus500 is an online broker that is authorised and regulated by the Cyprus Securities and Exchange Commission (Licence No. 250/14).  They are also regulated by the Financial Conduct Authority (FRN 509909).

And yes, they also comply with its regulatory requirements. Below I’ll explain what makes it safe to use Plus500.

 

Client money protection

One of the regulatory requirements that is directly connected to us as the users is client money protection. This means that your money is protected, literally. When you open an account with Plus500 your funds will be held in accordance with the Cyprus Securities and Exchange Commission’s client funds rules. Under these rules, Plus500 pays each client’s funds into a segregated client bank account. This means the money you deposit goes into a separate bank account. They do not use your money to do anything for themselves.

Furthermore, Plus500 is debt free, has substantial liquidity and significant surplus regulatory capital reserves over its regulatory requirements. This means, because of having more than 1 million clients worldwide that carry out millions of transactions per month, they have enough reserved money to protect yours.

 

Negative balance protection

Another thing worth mentioning is that you cannot lose more money than you deposited, as Plus500 is one of the few CFD online brokers that offer negative balance protection. This means you do not owe the broker money in case your account has a negative balance (goes below zero). It could happen that a trade moves so fast that the money you used to open the account isn’t enough. With negative balance protection Plus500 automatically closes your position when it goes below zero, which is called margin call. This way you cannot lose more than you deposited. I think this is extremely important to know as there are many online brokers out there that doesn’t have it.

 

Withdrawing money with Plus500

Withdrawing money is easy. There are just a couple of steps that need to be done. You have to upload a couple of identification documents first. This is to ensure no money laundering (fraud) and to be sure that the money you deposit goes into the right person’s bank account, so nobody can steal from you if for example by any chance they’ve hacked your account. This means you can only withdraw your deposited money to a bank account using the same name as your identification document.

These are the documents that you need to upload:

  • Address verification document (must be a bill that has your full name and address on it)
  • Any ID or passport.

Withdrawing money does not cost anything and usually takes up to 3-5 workdays, which isn’t long at all. My personal experience is that my withdraw shows up within 3 days if I use the wire transfer method.

 

Depositing money in Plus500

As for depositing money with Plus500, it’s also easy. The following methods are accepted:

  • Visa/Mastercard
  • Skrill
  • Wire Transfer
  • PayPal
  • iDEAL

After using one of your favorite forms of payments, it is displayed in your account immediately and you can use it immediately. If you don’t want to use the money you deposited anymore. No problem! You can just withdraw it again anytime, without any additional costs.

 

Please also check out our other tips on how to recognize a good CFD broker.

 

These few reasons is why we have chosen Plus500 as our favorite online broker, because it’s safe and we are not scared of depositing our money in their platform. We trust them. Also, we are already making a small extra income every month by using it.

If you have any trouble, please let us know and we will try and contact them for you to solve your problem. Got any other questions? Please feel free to comment below this article.

Frequently Asked Questions (FAQ) about trading

Ever wanted to make money whenever and wherever you want? Start trading now and receive a 25 dollar welcome bonus

We get asked a ton of questions about trading. Here are some frequently asked one’s put together.

I’m new to trading, where do I start?

Start with registering for an account at an online broker right away, because you can start using demo simulations of the trading platform to start learning. Pick one here and start reading our how to trade like a pro guide whilst practicing with the demo platform. The best way to learn is to do it. Once registered, you will also get £20 bonus money to start trading for real. Once a little prepared, you can also use this to practice for real money, without using a dime of your own. Also, keep on reading our trading blogs, for example: how to profit with CFD trading with only 160 euro.

 

How much money does a trader need to start trading?

Answers varies when it comes to how much money you need, from only £5 to £50.000. It all depends on how you want to trade, your personality, circumstances, trading strategies and goals.

You can also just sign up for an online broker like Plus500, where they offer you bonus money when you open an account. So it is possible to start trading real money without using a single cent of your own.

I started with only 50 euro and then I started practicing for real until I saved up around 2.5k. I had this amount of money set as goal and didn’t stop until I reached it. Now I set it apart as the only money I use for trading, nothing else. I don’t touch this amount and only use it to trade. If I lose, I have to add more in there. Anything up this amount is profit which I allow myself to freely use. Every now and then, when I think it’s time, I will up the amount of money I set apart.

 

How long does it take to make a stable income with trading?

Answers here also varies. People have been able to make a stable income within only 6 months, some people think you will never be able to do it. I and my fellow traders believe in the first, in being able to make a stable income. How long it takes? Hard to answer, because this also depends on how you are as a person and how much risk you are willing to take. I have been doing this for over 3 years now and I am finally starting to make a stable income from it. I still work besides trading, but I can work less with it.
Here are the steps that you should take when starting to trade:

  1. Set your own pace
    For example: use a 3 month period where you read our articles and practice in demo in the 1st The 2nd month is for trying out trading with a small amount of money until you reach about 8/10 profitable positions. 3rd month is for setting your own trading strategy.
  2. Get experience fast.
    In my experience you don’t learn until you start doing it right away. Learn by using small amounts of money first. Also, you don’t learn to stand up until you fall. So get ready to lose a small amount of real money, just to feel how it feels like!
  3. Stay active on trading forums like ours, share and learn from others
    I could have never gotten this far without my trading friends, online and offline. Post your strategy in our forum, share your thoughts and welcome feedback, critiques, whatever people have to say about it. This is the only way to learn on how to profit.

 

Is trading the same as gambling?

No, it isn’t the same as gambling, as gambling has no educated arguments on whether you should open a position. As for trading you can educate yourself on which companies are worthwhile to start trading with. For us, trading is far from gambling. You can gamble without knowledge, but you can’t trade without a bit of knowledge on what you are doing.

 

Is it dangerous to trade with online brokers?

No, but you should find the ones that are regulated by the FCA to avoid scams. More information can be found on their website: //www.fca.org.uk/. The online brokers that we use are all regulated. Take a look at our brokers review to find out which ones is the best. My personal favorite is Plus500, for its ease and well-known credibility.

 

How difficult is it to trade?

It isn’t at all. Many people think that trading is only for people with profound knowledge of it, but you don’t. You can start at a young age and right away. Just make sure you don’t use more money than you need.

 

Can you lose more money than you deposit?

Mostly no, but you need to make sure you are using an online broker that has negative balance protection. There are not many CFD brokers that has this kind protection. The brokers that we are using are one of the few, look at our brokers review here. Negative balance protection means that if your equity goes to 0, your position in closed automatically, instead of going to a negative number. This means you cannot lose more money than you deposit. If this happens, this is called ‘margin call’. Be sure to check out your brokers terms and conditions for ‘negative balance protection’.

 

What brokers are good to start with?

I personally recommend Plus500. Why? Because their platform is easy to understand, they are regulated by the FCA, so your money is safe, they have negative balance protection and they are also one of the few that provides that many CFD stocks. So you can start trading in any company you like. Be sure to check out or other reviewed brokers too for good brokers to start with.

Step 3: Trading plan

Online Trading: How to make a good profit with just 160 Euro

Start trading now to receive a 20 pounds welcome bonus!

Starting with online trading is much easier than you think. In this article we will explain to you how we trade and how we made a profit of 422 euro with only a small deposit of 160 euro.

 

Why online trading?

Trading used to be only for banks and big companies. Now, with the internet, it is possible for anyone with an internet connection to trade. This means you can not only trade from home, but from wherever you are and whenever you want. Besides this awesome fact, you can also trade with leverage. Leverage? Yes, with a leverage of 1:20 you can trade in stocks (CFD’s) 20 times more worth than your deposit. The advantage of this is that you can receive a very high profit with a small deposit.

For example:

Let’s say you have 100 pound and the leverage is 1:20, with only 100 pound you can open a position worth of 2.000 pound (100 * 20).

You can see with only a small deposit, you can make a big profit. This is perfect, because even if you don’t have a lot of money, you can make good money with online trading.

 

So how can you start online trading?

First of all, sign up to an online broker. Compare the best online brokers here and receive a 20 pound bonus to practice with. There are no obligations when you sign up, so go ahead and try it out. Find out how to receive more bonus here.

In our previous blog “Smart online trading in stock CTRIP: 1019 profit”, we have explained one of our trading strategies:

Guide-to-profit

  1. Find a reason to trade
  2. Open and close a position
  3. Evaluate your trade

Now how can you start doing exactly this? What sources do you use? This article explains just that. We will also use a real example of one of our own trades. Now you can follow these quick steps to begin to trade right away. The steps below follow the strategy that we learned before, but this time we put it in action! You can even use these steps below as a checklist for your own trading.

 

Step 1. Choosing the stock

First of all find a good earnings announcement calendar like the one from Yahoo:

  • Review which stocks have an earnings report coming out today.
  • Pay attention and only choose the ones that are available in your online broker stocklist.
  • Only choose stocks that have a time supplied. Write this down.
  • Find out what the leverage is, the higher, the better.
  • Find out about the company.

A real example:

On the 10th of June, 2015 we looked at the earnings calendar and we found Box Inc (NYSE: BOX). First thing we did was:

  • Find out if this stock was on Plus500, it is. Now let’s check the leverage: 1:20. Great!
  • The time of release is after market close. Love it! We tend to like these stocks more, because during after- and pre-market, you usually can predict what direction the stock is going. So at market open, we would be more prepared.
  • Now a little Google search helped us learn about this company, it is a technology company much like Dropbox. They use the cloud to give people the chance to back up or share their files online, so it can be accessed anywhere. This sounds good! Let’s move on.

 

Step 2. Should I open a long or short position?

After learning about the company, follow this checklist:

  • Find out whether the announcement will be good or bad. It doesn’t matter which direction it goes, because either way, you can profit. You should already know that the movement of a stock is almost always volatile whenever an earnings announcement gets released. To be sure, you could check the volume of the stock on Yahoo Finance, for example here.
  • StockTwits: one way to find out whether the earnings announcement will be good or bad is by reading what other people say about this stock. We tend to read StockTwits for this. For BOX the link is: //stocktwits.com/symbol/BOX.
    You can insert your own stock in the search field and then view what other people think about this stock. You can even see whether or not they think it is going up (bullish) or down (bearish). If you see a lot of bullish, it most likely will be bullish.

As for BOX, we could see it go up, not only because of what we read online, but also looking at the past quarterly earnings numbers. Where do we find these numbers? At the website of the company itself. All companies where you can invest in has an investors page. BOX’s investors page can be found at: //www.boxinvestorrelations.com/. Also, Google is your king.

 

Step 3. Open the position at the right timing

All this together has decided it for us. We think BOX will go up. Next we did the following:

  • Open a position not too early: we opened a buy position on BOX just before the news came out. As noted before, this is just before market close. Don’t open the position too early, because the normal daily volatility could give you a disadvantage.
  • Money deposit: also, we only deposit money that we want to use: 160 euro. Not more and not less, because this will help us not lose more than we want to. This is important! Only use money that you can afford to lose.

Now we wait.

 

Step 4. Closing the position

News is out! The market is still closed though. All we can do is check the stock price (the aftermarket/premarket one) constantly, you can use the NASDAQ after hours website for this. Yahoo Finance also provides this information. It is in the small font just under the open market price.

So what now? Be sure to be ready when the news comes out, the stock will now go up or down very fast. Our stock BOX moved up, we could already see the numbers in the aftermarket. The next day just before market open, check the numbers again. You will see at what price the stock will open. At this point we already knew that we had a win. The next thing to do is preparing ourselves to close the position as soon as possible. At market open, at the first possible opportunity we closed the position, grabbing our profit of 422 euro. Amazing!

plus500-result-box

Remember this: don’t ever be greedy. Unless you know how to use a stop loss, you can wait before closing the position. More about stop loss strategies will come later.

 

Step 5. Withdraw your money unless you want to use it for a future trade again

Don’t let your money sit on your account. Withdraw it, use it, enjoy it! Online Trading isn’t all work, it should be fun too.

Now don’t forget to evaluate your online trading today, you can always learn from it for future trades.

Got questions? Feel free to ask them below.

 

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