Spread betting is a trader’s dream for many reasons – traders pay no UK Stamp Duty or UK Capital Gains Tax, while spread bettors also don’t get charged a commission fee. The rewards are also fairly attractive if you make the correct calls, but how can you better assist yourself when giving this method of trading a bash? For more information on spread betting visit this page. Let’s take a look at a few important aspects that can help you find your feet.
Stick to Reputable Knowledge Sources
As one can imagine there are myriad sources of knowledge, in friendship circles and on the Internet, when it comes to any method of trading. Spread betting is no different, and therefore you are bound to find various chancers trying to sell you any number of best practices when it comes to spread betting. Keep an eye out here for what it legitimate and what isn’t. There is the chance to employ established brokers in the market, for example, City Index offers spread betting and provides a wealth of information as well as advice on the subject.
Furthermore, adverts online will attempt to sell you surefire ways to spread bet, but the reality is that spread betting depends on various situations, and that questions need to be asked. This is why one should try and gain knowledge where Q&A sessions can be carried out, like a seminar, or connecting with experienced trader online. Don’t get sucked into false advertising promising you life changing knowledge.
Watch the News
The news has a great effect on sending markets up or down. If spread betting on currencies, then the news will always prove a great tool. For example, if news breaks that Brexit is about to have a slightly negative effect on the United Kingdom, the Euro will most likely strengthen against the British Pound. Interest rate hikes will always have an effect on a country’s stock indices, bonds and other assets. Keeping up to date on political situations around the world can only assist in helping you predetermine what markets will do, and therefore decide on whether to sell short or buy long.
Don’t Get Carried Away
Traders new to spread betting can often throw too much into trades, resulting in dire consequences. Traders will then often follow up losses with larger bets in an attempt to recoup what was initially lost. As one can surmise this all can become fairly nasty. Take it slow when you begin spread betting. The trading platform itself can take a little time to learn, while one can only benefit from experience. Rather gain experience at a steady rate as opposed to hoping for high returns right away. Begin by aiming for £1 or below per point.
Trade What You Know
This is quite important, as trading takes a bit of knowledge, not only of the trading platforms and technology used, but also the markets that you are trading in. If one connects with experienced traders through social trading you’ll usually find that the most experienced, successful traders specialise in one market. For example, if you already know a little bit about equities then perhaps go with spread betting shares.
A Few Extra’s
Having a trading strategy is always a good thing. If one starts winning or losing they will often be tempted to change their strategy by betting more or less. Stick to the strategy and add a stop loss order so that your trade will close if you lose a certain amount.
Demo accounts are also useful for getting to know the trading platform, and to experience a point rise and loss, and how fast or slowly they happen. These accounts are free and allow you to use fake funds to test the waters.
As a business owner getting involved in spread betting, be careful to manage finances properly. At the end of the day it is best to keep a level head and not let your emotional side lead you. Try and be as calculating and logical as possible, while gaining knowledge and experience to help you on your way.
