Spread Betting Tips

By mosesbet · Filed Under Spread Betting Comments Off on Spread Betting Tips 

Should you be Spread Betting as a Beginner?

All spread betting companies are regulated by the FSA.  If you are over the age of 18 and a UK resident then you will be allowed to open an account with any of the spread betting platforms available on the market.

There are big risks involved in spread betting.  You need to think carefully before you open an account and start trading.  I think around 90% of spread bettors are male, with an income above £50k and have experience working in the city or a solid knowledge of stock markets.  To be a successful trader and spread bettor, you need to have discipline and risk tolerance.  Although spread betting can be very profitable in comparison to regular financial trading and purchasing stocks the conventional way, the risks are still there, and it is easily possible to make big losses with a small starting capital.  The risks are big because on average, 6 out of 10 spread bets will lose money (although this could be profitable in the long run, if you make more profit on the 4 bets than losses in the 6 bets).

It is vital that you use spread betting bankroll management to prevent your risk exposure.  Most experienced spread bettors from forums such as Trade2win.com suggest risking a maximum of 1% of your bankroll for each bet.  So for example, let’s say you have a stop-loss order of 10pts.  That means if your total bankroll is £1,000, you only want to risk £10, which means you should wager a maximum of £1 per point.

Time management is also important for succeeding in spread betting. Whether you are shorting stock or wagering on multiple positions, you need to be very organized and planning in where you money is, and well to sell the offer price.

Finally, as with all forms of gambling, spread betting can be mildly addictive.  This may cause problems among some bettors.

Spread Betting Strategy

Because trading on the financial markets requires a consummate level of experience and industry knowledge, you have got to decide what your strategy will be.  For example, do you prefer to trade/bet based on fundamentals or will you look at technical signals off a chart, or both?  Digital Look is a very useful website with lots of free information.  For technical signals there are a number of free journals and books you can read.

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