Spread Betting Tips

Most spread betters find it very hard to follow rules but the most successful traders are consistent, organized and follow certain guidelines in order to generate profits

1. ALWAYS USE A STOP LOSS.

A ’stop loss’ trade is one that is made in order to set a limit to the loss made by  an adverse price movement.  A stop loss is an order entered into the market that is triggered if the market hits a certain price.  At Getdealing.com we provide you with compulsory guaranteed stop-losses, so it is not possible for you to lose more than your initial stake and deposit

2. DON'T OVER TRADE

It is tempting to get carried away and try to trade on every little movement the market makes.  Wait until you have high conviction and a REASON for putting the trade on. Good opportunities will present themselves to you in time so don't just guess and trade too frequently as you will lose your capital.

3. ONLY TRADE WITH CAPITAL YOU CAN AFFORD TO LOSE.

If the money you are using to trade is going to affect your life and wellbeing if lost you will not be able to think clearly and subjectively and will make poor decisions that will lead you to losses.

4. RUN YOUR PROFITS NOT YOUR LOSSES

While watching the market as a new trader it is very easy to come to the conclusion that if you hold your position for a long enough period of time it will eventually make a profit. This will lead you to hold onto a losing position for far too long in the belief that it will eventually turn around. You may get away with this strategy once, twice... even 10 times in a row but eventually it will lead you to ruin. It is equally important to give your profits time and allow them to run. It is tempting for a new trader to close each position as soon as you see any kind of profit. CUT THOSE LOSSES RUN THOSE PROFITS!

5. HOLD YOUR CONVICTIONS LIGHTLY.

Often the markets will make no sense and will not react to news and data in any kind of logical way. For example news that could be considered good for the economy and should have a positive impact on a particular market could do the opposite for no apparent reason, as John Maynard Keynes said ’The market can remain irrational longer than you can remain solvent.’ - So you must be nimble and ready to cut losses even if you think ’the market’ has got it wrong... You should have a pre-determined amount of money you were prepared to risk that if arrived at will make you exit the market regardless of your views.

6. DON'T TRADE TOO BIG

Spread betting companies will offer you huge leverage so it is up to you to keep your bet size (stake) limited to a size that you feel comfortable with. If you can't sleep at night because you are worried about your spread betting position you are trading too big and must reduce your stake size. Your stake size should be in proportion to the total funds you have available to spread bet with, ideally so if you lose on any one trade you will lose no more than about 10% of the account size.

7. KEEP YOUR EMOTIONS UNDER CONTROL

Do not trade if you are angry, depressed or desperate as you will lose the ability to make rational objective decisions.

It is perfectly natural when spread betting to feel excited when you are making money and anxious when you are losing it but you must recognise if these emotions become extreme and stop trading immediately.

8. TAKE WINNINGS OUT OF YOUR ACCOUNT FROM TIME TO TIME.

The reason there are so many health warnings about spread betting is the fact that you can lose money REALLY quickly and with some spread betting companies you can possibly lose more than you have deposited in the account. (not at getdealing.com!)There is every possibility that at some point you will wipe out ALL the funds in your account so to make sure you actually profit from spread betting over the long term you must periodically withdraw some of your winnings. Set yourself a target and once you have reached that amount withdraw it and treat yourself.