Top 10 spread betting tips
Here are 10 spread betting tips that will get you on the right track, but remember there is no one right formula it will require hard work and tenacity for a successful spread betting career.
1. Start small don’t over stretch yourself
Granted its an exciting industry to get into but many new individuals end up losing huge amounts of money in their initial months of trading due to poor planning and understanding of what they are doing. Quite simply they put on too much per trade, i.e. start at £1-10 a point, which means your losses can be large compared to the amount you are staking.
Some spread betting companies actually only allow new accounts to trade at 10p a point, meaning that people can try it out before going on to bigger stakes.
2. Vary your trading size and learn what works
Learn what the market is doing and therefore what you should bet accordingly. Not every trade deserves the same risk, so this is where you need history and common sense to help you prevail. If the risk is low you could increase your bet and conversely if the risk is high, only bet with small amounts.
3. Control those costs
Any successful business is always looking at its bottom line, which is governed by its profit and loss. This is the bid-offer spread, so always keep an eye on what your being offered and be prepared to walk away if it doesn’t work for you.
4. Don’t be fooled by winning and losing
Most people would say if a trader was winning most of the time that it was good, right?
Wrong, because he could be winning lots of small trades, but when he loses he loses big. You need to focus on the right metrics, are you up over time? Sometimes you can get things wrong, but don’t let this deter you just make sure your losses are small and your profits are greater.
5. Stop Losses get them right
Stop Losses are the single most important thing to get right in spread betting. Many spread betters have had a few trades that have decimated their accounts because they didn’t have a stop loss in place. Stop losses can frustrate you as you may get closed out before it bounces back, but you would rather that than losing significant money in one go.
6. Learn when not to trade
Don’t feel you have to trade all the time, this is a misconception that many people have when starting out spread betting. Patience is needed in this game and its important to pick your trades carefully. You may not trade for weeks, but then win big on something you have strategically been following.
7. Its all pyschological
Mass media are good a spreading two things fear and greed. These two factors drive markets massively and allow spread betters huge margins, when the market swings. Like in many gambling situations it a bout holding your nerve and not letting outside factors cloud your judgement. Timing is key of when to buy and sell, so you need to kow yourself whether you have the ability to control yourself in high pressure situations.
8. Jack of all trades, master of none
Don’t try and do everything, its simple advice but many fall at this hurdle. Try to specialise in a certain area and learn it inside out so you can effectively become a specailist in that area. This allows you to have an advantage, as you have build up a history and this should stand you in good stead to make educated decisions.
9. Its not for everyone
Reality is spread betting is not going to be for everyone. It requires a certain type of person who can be strategic, patient and smart. You are not going to become a millionaire overnight it takes a while for you to find your niche and takes you longer to perfect it. Speculating is hard so make sure your ready for the challenge.
10. Spread betting courses and strategies
There are two things that all new traders will be faced with; expensive courses that claim to give you everything you need to be successful and systems/strategy tools that will give you quick riches. Take heed of the old adage if is to good to be true then it probably is. The internet is full of great free information to help you get started, so look around.
Those spread betting tips should make you see that there is no magic bullet, so don’t waste your time trying to find an easy way. Ultimately it is going to be you that determines whether you succeed or fail.
We hoped you have enjoyed our spread betting tips and if you have any to add then please comment below.