Categories: Finance

Top 5 Tips For Spread Betting Beginners

Spread betting is one of the most popular ways to make Money online. Whilst more and more people are opening accounts to achieve financial freedom, or perhaps just a second income, it is worth remembering a few simple tips which all successful traders employ:

1. Focus on losses rather than profits. It is too easy to become carried away analyzing and back-testing how much profit a spread betting strategy will make whilst forgetting that the crunch will come down to losses. All successful traders and spread betters will say that the first thing that they try to do is protect their existing capital with a solid risk management strategy including maintaining losses to an absolute minimum.

2. Thoroughly develop a strategy before you trade and stick to this no matter what. Back-testing a strategy will show you whether it has the potential to be profitable in the future. Despite having a great system, many spread traders struggle to follow their back-tested rules when it comes to real-time trading. Sticking to the plan is the only way to maximize the chances of success trading any system.

3. Use stop losses with every trade. Stop losses are the most important feature of any trading system. Too wide and they can expose you to large losses and too close and they can stop-out profitable trades. The key is to find a balance and make sure that there is always a stop-loss attached to every position. This prevents the temptation to let a position run and also gives you a better chance of getting out of the market if it becomes overly volatile. Using stop-losses to protect profit is also one of the most successful ways to become profitable.

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4. Choose your broker well. Selecting the broker offer ring the best introductory offer is not always the best long-term option. Those that provide educational resources over simple cash incentives are going to benefit new traders much more in the long-term and have in interest in keeping you trading with them for as long as possible.

5. Only ever risk a maximum of 2% of your trading account on any single trade. This sounds tiny and almost impossible to profit from with a small account but do the math’s; it means that your account will not only be able to withstand multiple losses but will also grow steadily larger as you become more profitable.

This top 5 list has been created by Tristan from http://www.spread.co.uk who wants to help spread betting beginners get into the market with the best possible preparation.

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