Spread Betting Tips
There are many different spread betting strategies you might employ, depending on your trading style, your attitude to risk and your preferred methods of analysis. But at a more basic level each spread betting client should follow the same fundamental rules to ensure that your trading activity addresses your specific trading goals.
Test your provider
Apply the same rigour to choosing your spread betting provider as you do to choosing which markets to trade. This is one of your most important trading decisions. And be prepared to switch providers if you are no longer getting the service you need. Draw up a checklist of your requirements, then choose the spread betting firm that best fits your criteria.
Do you need personal customer service? Do you want free trading tools to support your trading? Is a reliable platform your number one priority? When you’ve answered these questions you can find the best provider for your needs.
Manage your risk
Spread betting lets you maximise the return on your investment capital, but it will equally maximise your risk. Stop-loss orders can help you to control your risk on individual positions and across your spread betting portfolio, without restricting your profit potential, but remember that stop-losses are not guaranteed and may be subject to slippage and market gaps.
You might also consider staggering your entry points. That is, when you have a signal to trade, instead of taking your full exposure at one entry point, you could create a series of smaller positions as the market (hopefully) moves in your favour. This way, if the predicted price move fails to occur, you are not as heavily exposed. And as (with InterTrader) there is no minimum charge per trade, there is no drawback to taking multiple positions.
Your trading plan is your best judgement of how you can achieve your trading goals. Trust the plan when things are not going so well, and don’t be tempted to deviate from it when you have a few winning trades. Learning to control your emotions is a key part of spread betting, as you develop a robust trading psychology.
Learn from your losses. Each one contains a lesson. As part of your trading plan you should have a strategy for coping with the potential downside, defining your maximum acceptable loss per trade and across your spread betting portfolio. Be confident but don’t bury your head in the sand – losses are a natural part of your trading life.
Use trading tools
Most traders will use some combination of technical analysis, fundamental analysis and analysis of the effects of news events on the markets. In order to do this you will need access to historic price data, charting software, financial statements, macroeconomic data and news feeds.
With InterTrader you get free unlimited use of IT-Finance advanced trading charts, expert technical and fundamental analysis, live market news and squawk, plus trading signals on the most popular spread betting markets. No doubt you will develop your preferred methods for picking trades, but remember to build them into a systematic process, part of your daily trading routine.
Manage your time
Spread betting makes demands on your time. You should take care to allot time in your schedule for planning, time for research, time for trading, and don’t spread yourself too thin. Each aspect of your trading process is critical.
To make best use of your time, focus your spread betting on markets you understand well. There are thousands of markets to trade with InterTrader but you don’t have to trade them all! You can also save time by setting up orders to implement your trading plan, and using mobile trading platforms to trade on the move.
Practice with a demo account
The best way to develop your understanding of spread betting is by placing trades, and with a demo account you can run virtual spread bets without taking on any risk. A demo account is also a good way to test out your prospective spread betting provider’s service.
InterTrader offers a free demo account that gives access to the InterTrader online platform with a virtual cash balance of £10,000.