Generally, people follow certain brands that they love, and have some experience of how its performance or release of a new product may affect its share price. Therefore, when someone starts trading, indices are a natural next step.
Since trading indices means taking a position on several stocks in one position, the composition of the index may include the brand that you love and other assets that can mitigate the risk compared to just trading a single stock.
Some of the factors that affect an index’s price include big events like interest rate decisions, a country’s economic performance and many others. This is why it’s prudent to use fundamental analysis to support your decision to take a particular position.
Forex trading tends to be the preferred market by professional traders, as it is more complex in comparison to indices trading. You must ensure that you know how to trade forex, have a good grasp of the method you’re going to use and a solid trading strategy before you get exposure.
As a beginner, it’s important to supplement your knowledge before you start trading with real money. You can use IG Academy – a self-learning hub, complete with comprehensive trading resources – to help you learn at your own pace.
Beginners are encouraged to open a demo account thereafter. This is a simulated market environment that aims to recreate the experience of ‘real’ trading as closely as possible.
You’ll get a feel for how different products and financial markets work without the risk of losing any real money, so that you can explore and experiment using different trading strategies with confidence.
When you open a demo account with us, you’ll be given immediate access to a version of our online platform, along with a pre-set balance of £10,000 in virtual funds to practise with. Once you’ve gained enough confidence and you’re familiar with trading on the platform, you can decide to upgrade to a live account.
If you have a short-term outlook, you’ll trade indices or forex with us using spread bets and CFDs. Alternatively, if you have a long-term outlook, you can buy and hold index shares or ETFs using our share dealing offering.
