For IBs · Part 1 · Lessons 1 to 3 · Prototype
Short steps, one idea at a time. Most steps ask you to try something before you move on.
These are the lessons your clients take. At the end of each lesson there is a note for you: how to say it in one line, what clients will ask, and what not to say.
Read this first
of retail CFD accounts lose money, from EU regulators' analyses reported by ESMA in 2018.
of retail CFD clients lost money in Australia in the 2024 financial year, as reported by ASIC.
Trade only with money you can afford to lose. This Academy puts risk first: every tool shows the loss next to the gain.
The lessons
Coming in Part 1
Lesson 1 · NAS100
What you hold
Step 1 of 7
Learn
NAS100 follows the 100 biggest companies on the Nasdaq. There are two ways to profit when it rises.
You own units of a fund that holds the shares. You pay the full price.
You hold a contract with your broker on the price. You put down only a small deposit.
CFD stands for contract for difference. Every lesson in this Academy uses CFDs.
Try it
You and your broker swap the change in the price. You bought: if it rises, the broker pays you. If it falls, you pay the broker.
The broker pays you $10.00
You bought 0.1 lot, so each point is $0.10. On a typical day NAS100 covers about 466 points from low to high.
Your broker is on the other side of every CFD you open.
Check
Try it
The nightly charge is called swap. A fund charges a small yearly fee instead. Drag to compare them on the same $2,842 of NAS100.
Check
Sort it
Five sentences, one at a time. Pick the way of holding NAS100 that each one describes.
Lesson 1 done
| Owning a Nasdaq-100 fund | NAS100 CFD | |
|---|---|---|
| What you hold | Units of a fund that owns the shares | A contract with your broker that pays the price change |
| What you put up | The full price | A small deposit, called margin (lesson 2) |
| Can you lose more than you put in? | No | Yes, losses can reach the rest of your balance. Some brokers stop you going below zero; check your account terms. |
| Going short | Hard. You must borrow the shares first. | One click, same as buying |
| Holding costs | A small yearly fund fee | A charge every night you hold, called swap |
| Dividends | The fund receives them and pays them out or reinvests them | A cash adjustment: added on a buy, taken on a sell |
| Who sets the price | The stock exchange | Your broker's price feed |
Try it
To open a trade, the broker holds part of your balance. That is margin. Leverage sets how small it can be.
Gold's smallest trade is 0.01 lot: 1 ounce, worth about $4,162. Your account has $500.
Higher leverage lets you open a bigger trade. It does not change what each $1 move costs you.
Check
Learn, then check
Equity is your balance plus or minus your open trade. Margin level is equity divided by margin. As your loss grows, it falls.
These are example levels. Your account terms set the real ones.
Try it · 1 of 3
A real day from the STARTRADER demo, with a range close to a typical day's. Press play and watch the margin level.
Try it · 2 of 3
This day moved as much as the biggest day in ten. That happens about twice a month. Same settings as before.
Try it · 3 of 3
Now the lot size is yours. Find a trade that gets through the big day without a stop-out.
Your turn · optional
All the settings are open. One to try: switch 1:500 to 1:30. The profit per $1 move stays the same. The margin and the stop-out price change.
Check
Lesson 2 done
Learn
"0.01 lot" is not one size. What it buys depends on the instrument.
1 lot = 100 ounces
Smallest: 0.01 lot = 1 ounce1 lot = 100,000 euros
Smallest: 0.01 lot = 1,000 euros1 lot = 100 barrels
Smallest: 0.1 lot = 10 barrels1 lot = 1 × the index
Smallest: 0.1 lot1 lot = 1 × the index
Smallest: 0.1 lotSizes from the STARTRADER demo. Other brokers can differ, so check the contract specification.
Guess first
On a typical day, which of these moves your account the most at its smallest size?
A typical day at the smallest trade
Dollars, median day
Learn, then check
Try it
Pick an instrument and a size. See what an ordinary hour, an ordinary day and a big day mean in money.
Check
Learn, then check
The rule in this Academy: risk at most 1% of your account on one trade. With the stop a quarter of a typical day away, this is the smallest account each one needs at its smallest trade.
Lesson 3 done
Coming next
Lesson 4 · What a trade costs. Spread, commission and swap, with EURUSD and Brent.
Entry is the day's first price. Margin call 100% and stop-out 50% are example levels. Spread and swap are left out here and come in lesson 4.
