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Stop Losses

The information on this page is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

A stop loss is an automatic order to close a trade when the price reaches a set level. They are key for CFD and SpreadBet traders in terms of stopping losses getting any worse and protecting profits from erosion.

There’s a well-known saying in trading: “let profits run and cut losses early“. Closing a position which is going wrong early enough allows you take stock of a situation, with capital still intact, and to look for a better opportunity.Leaving a losing position, hoping that “it’ll come back” can be dangerous.

Trading using CFDs/Spread Bets allows you to change tack quickly, from bullish to bearish in seconds. Knowing when to change your mind can mean the difference between a small and a big loss. A few decent profits versus a few small losses makes a profitable trader. Below are some tools for minimising losses and preserving profits.

Standard Stop Losses

These are placed at a price you consider to be your worst-case scenario. A point at which you would no longer wish to be in the position, preferring to be closed out automatically at the current market price before losses get any worse/profits erode any further. Stop levels can be amended as often as desired but there are limits as to how close they can be to the price, depending on what you trade (Shares, Indices, FX, Commodities).

Note that prices can move straight through stops (‘gapping‘), if trading is volatile. With Stop losses being executed at the current market price, the gap down (or up, if you are trading short) could mean you are closed out at a different price to your chosen stop level. This risk is only avoidable by using Guaranteed Stops (see later).

Trailing Stop Losses

These are similar to Standard Stop losses, and bring us back to the point about letting profits run. The trailing stop is again placed at your worst-case scenario (‘gapping’ still possible), however, should the position move in your favour the trailing stop will ‘trail the move higher’.

For example, if you were Long, you could set the stop so that if the price moves up by 1%, the stop will also move up by 1%. This can help reduce any potential loss without needing to watch the position constantly and, if it the price keeps moving higher, and through the entry price, eventually be protecting profit.

Like a standard stop, there are limits as to how close they can be to the price, depending on what you trade (Shares, Indices, FX, Commodities). Standard Stops can be changed to trailing at any time and vice versa.

Guaranteed Stops

Like a standard stop, but with no risk of ‘gapping’. The guarantee requires payment of a small premium when the trade is opened. As always, there are limits as to how close the stop can be to the price depending on what you  are trading.

Note this stop type is only available when opening a position and cannot be cancelled unless the trade is closed.

Key Tool

Most traders are happy to elect a worst-case scenario and put in a standard stop, but shouldn’t forget to amend them as their position moves into profit, to reduce risk or even lock in profits.

When a position moves into profit and a standard stop is left unchanged, profits are not protected and the price can always move all the way back to the entry point and even as far as the worst-case level (resulting in a loss).

Standard stops can always be changed to Trailing stops if the price is moving steadily in your favour, making the most of momentum to reduce risk and lock in profits so that when the price eventually moves against you the position can still be closed out automatically at a profit, breakeven or minimal loss.

It’ll come back

It is true that prices can fall all the way back to your entry point and then rebound, but is it not more profitable to exit with a profit and re-enter again at the original entry point with more capital to deploy? For the very aggressive, the return to the entry point could also be used as a short trading opportunity.

Illustration of a Trailing Stop Loss

For illustrative purposes only

1. Position opened at 1000p, with trailing stop 2%/20p away (980p)
2. As shares move up, stop revised automatically to remain 20p away
3. When shares reach 1100p, stop has moved up to 1080p
4. Position closed out at 1080p as shares fall, locking in 80p profit.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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George

I have found Accendo staff very helpful,,and informed. I have traded with you for some years now and have no regrets. Keep up the good work!

Posted 1 month ago

Shaun D

since signing up for Accendo I have had two traders, Mark and Sam. I have found both of these to be very informative about how CFD's work and they have made it very easy for me. Since working with Sam (last four months) my trading knowledge has improved and I can make more informative decisions about which Company's to invest with. Keep up the good work Sam.

Posted 4 months ago

Anonymous

I am very happy with the service I get from Accendo Markets and in particular Amrit Panesar. He is very professional and pleasant to speak to and this counts for a lot.

Posted 6 months ago

Shreekant P

Its a good site for dealing stocks worldwide and having good staff.

Posted 7 months ago

Nick W

Krishan Appiah is one of the most dedicated / informative broker I have ever had.

Posted 7 months ago

Thomas I

Since I have been trading with Accendo Markets I have experienced much greater success than has been my experience with other trading companies mainly due to the help given by, what I consider to be my terminal with the trading floor, Mark, who has been most helpful in reminding me of the progress of my positions throughout the day and keeping me in touch with those positions so that I can more easily make successful trades when appropriate instead of missing out on opportunities through lack of attention. He draws my attention to the situations and enables me to make profitable trades. I am very happy with the situation at the moment and am enjoying the experience. Thomas Irving.

Posted 8 months ago

Kartik A

Accendo markets keep me connected with the market and its very well followed by Mr. Krishan Appiah ,which helps me to take certain decision on time.

Posted 8 months ago

Peter p

I have been trading with Accendo Markets and James Abbott my account manager for coming on 5 years now, James Abbott the senior trader of Accendo Markets provides me with up to minute information when I need it and find him very easy and professional to deal with. Whenever I need to trade or am not sure about anything James is always their to help with any queries I may have. The Accendo Platform I find very easy to use and navigate although it has been slightly changed over the years but definitely for the better. Personal when I do trade 90% of the time, I rather telephone call to place my trade dealings and if James is not there to take my call I find others at Accendo like Sam, Lee take my trades and are. All in all everyone at Accendo Markets are amazing to deal with and my relationship with Accendo is just as I like it. Peter Petrou

Posted 1 year ago

Mrs. J

"Our Trader, Aymen Azizi, has been nothing but attentive to our every need throughout our long relationship with him. No issue is too small, full explanations on all our questions."

Posted 1 year ago

Brian R

I have been with Accendo for a long time now, ten or twelve year's, probably more . As I told Sam (my trader) I thought that CFDs were better than sex . I stopped trading for a few years and only started back about a couple of months ago. But it is as if I had never been gone , so to speak. Sam has helped me every step of the way, at my age one forgets things. I have only praise for Accendo and as far as I am concerned the platform is the best . Now I am back trading at 71 years of age, I might even try sex again. Brian Robertson.

Posted 1 year ago

Jim W

I understand how to make a profit with CFDs. I am restricted by the range of companies I have knowledge of. Although, I am not sure that is a big problem. Tom Robertson is a very fine man.

Posted 1 year ago

Rebekah S

Well, I would not be trading without the help of my trader, Sam Alnakkash. He provided a really great overview of Accendo Markets, an insight into trading in general and how to get started in trading online. His advice, support and training has been fantastic all along the way, enabling me to start trading earlier than I would have done had I not had the support. He has also been very adept at understanding me as a client in order to help me achieve my trading goals. I still have a lot to learn and hope I will get there.

Posted 1 year ago

Nick z

I like the updates on shares I trade. Updates from Bloomberg and Reuters plus industry updates and breaking news. I've had Matt Grice and James Abbott and found both to be excellent. I would like to continue a personal service with James. He understands how and which stocks I trade.

Posted 1 year ago

Steve O

Excellent, knowledgable broker interaction and communication, coupled with very good research and analysis.

Posted 1 year ago

William P

Being new to direct trading I needed help and was given all the time and advice that I needed to feel fully able to make decisions on what I wanted to invest in. I asked for and got exactly the type of info I required provided by Tom Cook, who I would recommend to anyone looking for help.

Posted 1 year ago

Mr. W

I have been dealing with accendo for the past 8 years my broker Amrit I find him very helpful when he is there lol and had many offers to change but will not do it Bill Roberts

Posted 1 year ago

Zoran N

Very good all round service! Timely market information. (charts + trends coverage ) On the ball accounts managers ,quickly available and alert . Part of my success owed to my personal manager Mr Sam Springet , than you.

Posted 1 year ago

Mr Brian C

Easy to deal with.....

Posted 1 year ago

Muhammed S

Accendo markets are great for trading cfds and their research is second to none! Aymen manages my account is extremely helpful and always keeps me updated on market info. Thanks again

Posted 1 year ago

Mr Buta B

Always available, whenever I call I get straight through to someone that can and will help. The staff are very knowledgeable, helpful and easy to talk to.

Posted 1 year ago

Stephen B

Aymen Azizi keeps an eye on what is happening in the market and informs me with timely relevancy, email call, and txt.

Posted 1 year ago

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