Since my post about Savings and Investments I have been debating dabbling in spread betting, so I have done my usual and researched the subject. I am in no way an expert and in fact a complete novice but here is my quick guide on how to spread bet with success!
First if all what exactly is spread betting?
It is a form of betting that allows you to speculate on market conditions without having to purchase the actual shares. You do not have to bet the whole of your capital and any wins are not liable for capital gains or stamp duty. If you are interested in starting out you need to find a financial trading company to work with like Fx Pro.
So here is my highlight from the information I have found:
When you are first stepping out into the spread betting world start small you can quickly lose your money if you go in too big, I would suggest a maximum of £1 per point for your first few months of trading.
Use a stop loss
As spread betting if a leveraged product you can lose more that your investment, as such it is very important you use a stop loss to reduce a potential loss and ensure your not eating into your gains.
Get into the mind set
One thing you need to get into your head, is the difference between Profit and Loss and win ratio, you can have some spread bet players out there who only win a small margin of the time, however their profit is financially viable. This can be due to the leverage used on some bets! On the other hand you may have some players winning 90% of the time but in the 10% losses they have suffered an incredibly.
It seems apparent that you should attempt to specialise in some markets, not only to allow you to find the sweet spots but to all you to focus on just a few things rather than having to exhaust yourself monitoring numerous markets. Meaning you can make your investments count and really bolster up you profits!
With all that being said you need to ensure you have done your own homework you do not want to lose all your hard earned savings, and remember you can lose more than you invest. I am still undecided in which way I intend to make my investments, but I will go into it with my eyes wide open, that is a must.