September 1, 2014

Spread Betting Tips

Spread Betting and Contracts for Difference (CFDs) are risky games but with high risk comes potentially high rewards! These Spread Betting /CFD tips aim to help you fully understand the market better to help you get the most out of spread betting:

Firstly, open a FREE demo account

There are numerous spread betting providers out there, and the majority allow you to open a free virtual trading account. These free accounts with give you a free virtual sum of money, of which you are free to spread bet with. Before considering playing for real, ensure that you are confident in what you are doing as well as the services offered by the spread betting provider.

After the initial trial, get serious even if it is virtual money. Imagine that every bet you place is as if it were your own money. This will encourage you to see the realities of spread betting.

Decide on what you are going to bet on

Financial spread betting companies allow you to bet on a whole variety of assets, ranging from stock market indices to individual companies. Each asset type carries a different level of risk. For example, commodities can be very volatile to bet on especially for newcomers, therefore it makes sense to bet on assets or shares with less volatility.

Once you’ve established what financial asset you are going to bet on, then aim to stick with it become an expert rather than going after a whole variety of markets.

Deciding how much to trade with

Most spread betting firms will allow you to bet with just a couple hundred of pounds, however looking to start with around £1000 will allow you to absorb any potential greater losses.

Set a stop loss and know when to exit

It is now possible to set a ‘stop loss’ on bets, these are ideal to stop you owing large amounts of favour should your spread bet head in the wrong direction. Also, you should know when to exit. It is very easy to get caught up in the spirit of spread betting and  place trades on an impulse.

Place your bet at the right time

Placing your bet is crucial to the potential success of a spread bet. As a general rule of thumb, spread bets should only be placed when you believe that the asset will sharply rise or fall (depending on your position). This will give you the maximum reward potential.