Per point trading is the classic way to trade a market, by 'buying' when you think the market price will rise, and 'selling' when the price goes up, to collect your profits. You can also place the trade in the opposite direction, if you think a market price is going to fall (you sell and then you buy).

(Please note: In the numerical examples, the symbol ğ represents the 'gnu' – our virtual play money currency. All examples equally apply to real money trades using £, € or $ currencies).

If you think a market price will rise:

Open a 'buy' trade at the 'buy' price for that market.

To make a profit: Close the trade by placing a 'sell' trade at the 'sell' price when the market has gone up in value.
 

If you think a market price will fall:

Open a 'sell' trade at the 'sell' price for that market.

To make a profit: Close the trade by placing a 'buy' trade at the 'buy' price when the market has gone down in value.

Minimise your trading risks:

When you open a buy or sell trade you must also set a Stop Order. A Stop Order closes the trade automatically at a price that you specify to limit the amount you could lose if the market moves against you.

You may adjust the Stop order/ stop level price at any time while a trade is open to further minimise risks and 'lock in' any gains (see section below). The minimum and maximum stop levels will vary, depending on the market you are trading and the amount of money in your account balance.

Closing a position will result in a profit or loss being realised on your account balance.

'Lock in' your profits and minimise your losses:

You can 'lock in' some gains or minimise any losses on part of your trade by partially closing the trade. You can do this by placing a new trade on the same market in the oppsite direction, using a lesser per point bet amount.

Example: If you have an open 'buy' trade on the FTSE at a bet amount of ğ5 per point, you can place a 'sell' trade on the FTSE at a lower bet amount, of e.g. ğ4, ğ3, ğ2 or ğ1 per point. (Note: a 'sell' trade at ğ5 per point would close the trade completely). Any profit or loss will be seen in your account balance.

See the gnuTrade Rules and Trading guide for the minimum and maximum bet sizes on per point and other types of trades.

Profits and losses

The following examples show how per point profits and losses are calculated:

If you buy the DOW for ğ10 per point at a buy price of 12000, and sell it later for ğ10 per point at a sell price of 12020, your profit is: (12020-12000) x ğ10 = ğ200.

If you sell the FTSE for ğ5 per point at a sell price of 5000, and buy it later for ğ5 per point at a buy price of 5010, your loss is: (5010-5000) x ğ5 = ğ50.

Managing your trading account balance

When you open a per point trade, funds are moved from your Account Balance to your Margin Balance to cover the maximum amount you could lose if the markets move against you.

The margin balance figure, ie, the amount you could lose if the markets move against you, depends upon where you have set your stop order level, and so it reflects the risk you are willing to take on your trade.

Remember you can adjust your stop order at any time or partially close trades to increase or decrease your margin balance. Decreasing your margin will return cash to your account so more funds are available to put on other trades.

When you close a trade in profit, the margin on the trade is returned to your cash balance, along with the profit.

When you close a trade at a loss, the amount you have lost is taken from the margin balance and the remainder is returned to your cash balance.
 

Keeping your trades open

Generally, all open trades are automatically closed when the market closes at the end of a trading day. However, you may use our rolling service to leave your trade open indefinitely.

You may set your trade to roll at the same time as when you open it, or at any time during the same trading day while the market is open. If you choose to cancel a roll, your trade will automatically close at the end of the trading day.

A daily rolling fee is taken from your gnu account cash balance overnight, so you must maintain adequate funds in the cash balance of your gnu account to cover the daily fees. If your cash balance has insufficient funds to cover the rolling fee on an open position, the trade will automatically close at the close of the market.

The rolling fee is a small percentage of the total value of your position per night. This % will change from time to time based on the overall volatility of the markets. See the gnuTrade Rules and Trading guide for the current rolling fee.

ğ10 x 1450 points x 0.195% = ğ28.28 for that night.
 

Overnight changes 

Please note that it is not uncommon for underlying market values to change over night (e.g. due to overnight news events), and therefore the market(s) you are trading may open at buy and sell prices which are different from those seen at the previous days close.

If a market's value moves beyond your stop order level overnight, your trade on that market will automatically close at the stop level you set.

Learn how to place a per point trade using the gnuTrade Trading Screen. 

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