Spread Betting Tipping - Online Financial Spread Betting

Financial Spread Trading Tips

1. Spread Betting has many benefits but if a market doesn't move around much then try to avoid it. With a market that's moving relatively little any profit could be eaten up by the spread. ie zero upside and the potential for downside. Try to stick with markets that do move up and down. Likewise if you do want to trade a slow moving market then plan to trade over a longer period of time. You may also be better off buying the share (s) if applicable

2. Try keeping your stakes minimal for your first year. Yes a 'year'. There's plenty of time to increase them later when you're more experienced

3. When you start trading with real money your emotions will catch up with you. After a few months compare your real money Trading Spreadsheet with your paper trades. It's likely that you've altered your thought / risk process a little. Again, ensure you stick to your plans and minimise the emotions that will come with real money trading. At least if you're betting minimal stakes you won't lose too much during this step of the training

4. When dealing over the phone check your trades online or via your contract notes. The dealers are human and will make mistakes. Note that the FSA requires them to record every trading conversation. If you do (or don't) believe you have placed a specific phone trade ask them to 'check the tapes'. They will even replay the conversation down the phone if you ask. But be polite, this gets boring for the traders and most of the time it's you who said Buy instead of Sell etc

5. After each online trade check your account history. Has the trade been logged correctly? Has the trade been logged at all? Is the stake size correct? Have you made a mistake? If you have any queries contact the relevant Customer Service Dept immediately

6. Open an account with a couple of the best spread betting companies. They will have variations in their spread sizes and quotes. Having a few accounts makes it easier to shop around for the best price

7. Don't risk large sums on any one trade. Bigger stakes are OK to a point provided you have sufficient reason (and funds) to increase them. But don't let your portfolio become unbalanced due to one or two trades that could easily undo all your good work. Remind yourself of the risks. Have a look in your Trading Spreadsheet and look at all of your 'good-bets-that-were-losers-due-to-unexpected-market-conditions' and other 'unknowns'

8. If you like the look of a share or market then follow it, don't just check it randomly
   
   

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9. It's easier to spot a trend than spot the top and bottom of a trend. Therefore it's easier and less risky to trade with the trends. You will miss the top and bottom of the curves but you should also reduce your losses

10. Cut your losses and let your profits run. Theoretically this is simple but in real life it's difficult to turn a potential loss into a real loss by closing the losing bet. It can be difficult to say I made a mistake. It can be difficult to write off all the research you've done. The greater your losses the more emotional and attached you become. It may also affect your other trades. If your trade has been running against you after 3 days ask yourself if you want to lose more? A stop loss will help you close a bet. When setting a stop loss try to work out the actual loss not the point movement. eg work out that you're prepared to lose a maximum of £500 per trade not a 30 point movement in this market or 12.5% change in that market. Thinking in cash will help you understand how much you could potentially lose

11. Running your profits. Another difficult area of trading. Being confident about your trading ability without being greedy. You might start thinking 'OK this bet's going well but I'm being greedy, I had better be disciplined and take the profit, after all I don't know where or when the market will move'. However you need to remember that you'll probably lose more trades than win. Only 40% of your trades might be successful. However those successful trades should cover the losses of your unsuccessful trades. The nature of the market suggests that to be profitable you'll have a high number of small losing spread bets and a low number of large winning spread bets. Don't forget you can always use a Stop Limit in order to protect your profits. Just remember that by closing the bet you are basically placing a new bet in the opposite direction that the trend is going. Would you place that bet normally? You are also paying the width of the spread and knocking a couple of points off your hard fought profit. Look at your plan and question whether you really want to place a new bet against the market. If it looks like a good thing then do so. Another protective option though is to part close the bet. eg close half of the bet and leave the other part running. Make sure you note down in your Trading Spreadsheet why you're doing that so you can analyse the affects later

12. Most traders like to Buy (go long) for the large majority of their trades. However successful traders also Sell (go short). It's a natural emotion to think positively and think about prices going up. Look out for markets that appear weak, look overpriced or that could go down

13. You have an Open Position. Fine. You decide to do nothing with it? Why? Doing nothing with an option position is the same as trading. Make sure you know why are you staying with the bet

14. Avoid Churn. With wide spreads spreadbetting can be expensive if you're constantly in and out of the markets. You may need to do more research to stop this. Alternatively try reducing your stake size and staying in your positions a little longer. You won't learn anything from constantly opening and closing bets

15. Just because a price has gone down a lot that doesn't mean it won't go down more. Similarly if a market has gone up a lot. Don't expect it to stop

Financial Spread Betting Tipping

Financial Spread Betting Tips - More