TOP TEN TIPS ON FINANCIAL SPREAD BETTING

Fundamentals, weather forecasts, market analysis, inventory information, currency interest rates, unemployment figures and agricultural reports are all substantial influences on spread betting for both long-term and day traders.
 
3. Have a plan:  It may seem simple, but it is surprising how many new spread bettors go in without sufficient organization and strategic thinking, lured to haste by the promise of fast, easy money.  Such short-sightedness can result in large losses and dramatically reduce your ability to react to new trading opportunities. 
 
Placing your first spread bet can be a daunting prospect so seek out a company offering a safety net for your first few trades. Some firms offer cash back of up to "250 to cover unforeseen losses whilst you are getting to grips with their products.  Write down every bet, the size of the trade, stop loss limits, and exit strategy.  Creating this kind of record will help give you a genuine feel for how spread betting works, as well as show trends in your betting.  Continue building the spread bet log as you begin trading with real money. 
 
Not having a plan makes it much easier to fall into bad habits, impulse trades, and emotional spread betting.
 
4. Start small:  Limit yourself to small trades at first - no more than 50 pence per point to start.  By risking less at the outset you stand to lose less while you get a feel for spread betting, allowing you to stay in the game longer and gain valuable experience without losing your entire bankroll.   
 
5. Adjust trade size according to risk:  Betting the same amount on every trade does not make much sense, but neither does varying your trades arbitrarily.
 
Size your bets in accordance with market fluctuations and your interpretation of risks.  Spread bets are high risk products. If the risk is low and you expect a small stop loss with a considerable potential profit, increase your bet size.  If the risk is high and you expect a greater stop loss, reduce the amount of your bet.
 
6. Making more profitable bets does not always result in net profits:  Most new spread bettors lose sight of the fact that profits are not dependent on being right most of the time.  At its most basic, the key to successful spread betting is to make more than you lose.  This has nothing to do with winning or losing.
 
For example:  Trader A is wrong 75 percent of the time with an average loss of "100; he is right 25 percent of the time with an average profit of "400.  Trader B is wrong 25 percent of the time with an average loss of "400; he is right 75 percent of the time with an average gain of "100.  Which trader is better off in the end?

7. Placing a 'Stop Loss' can be a financial life saver:  Most spread betting companies offer a host of different order types to help protect your capital. Always use a stop loss and be disciplined if the market moves towards your exit level. Far too often newcomers are tempted into moving their stop for fear of being taken out of the market at the low or high. A successful spread bettor goes into each trade with a stop loss and take profit target and sticks to it! 

8. Use a Good, Reliable Platform: A spread betting interface will vary from company to company, so it is important that you find a company have developed a quality platform for you to bet with. As any spread better will attest to, speed is key in a volatile market - a fast, accurate and stable system can make all the difference for an investor, ensuring that your bets can be sufficiently managed and controlled to avoid any unnecessary loss.

9. Specialize in just a handful of markets:  Financial spread betting provides access to a vast array of markets including stock indices like NASDAQ and FTSE; individual shares on international indices; futures and options; interest rates; currencies; commodities; bonds; and ETFs. 

Though it is tempting to set to trading in several areas as a way of increasing profit, this blanket strategy can actually decrease your chances for success.  Spread betting requires in-depth analysis and focused planning.  Limiting trades to just one or two markets give you an opportunity to build experience and figure out an approach that works.

10. Understand your account:  Not every spread bet account is created equally.  In fact, your trading practices could be limited by the type of account you set up.  Choose your account type based on your goals, trading budget, and experience. 
 
Controlled risk account holders are generally limited to just a few markets and may have upper limit restrictions on bets, while ordinary account holders have more flexibility.  Limited-risk accounts have wider spreads and are controlled by automatic minimum stop loss.  Normal account holders are responsible for managing their own risk by imposing custom stop losses when available.
 
As with any business endeavour, profitable financial spread betting takes research, strategy, experience, hard work, and time.  Educate yourself, understand the risks, set realistic expectations, and develop a plan that works for you. If you are in any doubt seek independent advice.
 
 
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