Spread Betting Tips for Beginners

Trading is a great way to make money. Most of you must have heard of terms like stock trading, commodity trading, and Forex Trading. But, I believe you don’t have much idea about spread betting.

The word “spread” refers to the sell (bid) and buy (offer). The spread betting company sets the price for you based on the live or predicted future market value. Unlike other forms of trading, you don’t purchase or sell the asset here. Instead, you make a bet on where you think the market will move.

In spread betting, you can make money from both increasing and decreasing market trends. It allows you to speculate on the moving stocks, commodities, and other assets without involving the stockbroker. What this means is you don’t need to pay extra commission to brokers. You can bet on stocks, commodities (gold, silver), forex market, and other assets.

This Pepperstone’s spread betting guide can give you detailed information on the concept of spread trading. It can also help you learn more about the process so you can become an experienced trader long term.

Spread Betting Tips To Trade Intelligently For Beginners

Although spread betting is a great way to make some extra cash, there’s a risk of losing your hard-earned money if you’re not careful. The first task is to choose a trusted trading platform for spread betting. Don’t rush onto trading after you sign up for a trading platform. Go through these tips to trade smart once you’re on the platform.

1)      Research First

Trading without researching is like going to a battle without weapons. Many beginners want to bet on their luck while trading. But, should you rely on luck for trading? Check out this article to know more about trading and the involvement of luck.

The best way to go about trading is to conduct thorough research at first. Go through critical economic data and announcements that could affect your position. Also, rely on both fundamental and technical analysis to make an educated guess.

2) Do Paper Trading

Making money is a lot of fun, but losing money can wipe out your confidence. Doing paper trading will allow you to analyze the potential of your strategy without risking your money. You can make a detailed plan about assets you want to trade and make modifications before trading with your cash.

3) Invest Only After Understanding

Resist the temptation to trade all kinds of assets like oil, gold, forex, stocks, etc. It will only lead to losing your hard-earned money. What you should do is understand one type of asset and trade it before investing in all sorts of assets.

4) Start Small

The rise of the internet has made many people seek instant gratification. It’s possible to make money fast, but this doesn’t work out well for most people. Making money quick is exciting, but losing money quick is equally painful, which is why we recommend starting small.

Start betting in one asset with a small amount of money. It’ll allow you to see if your trading strategy is working or not. On top of that, you’ll also come to know your mistakes, which will enable you to make a better strategy next time.

5) Monitor Market Movements

The market tends to fluctuate a lot during the first hour of trading. Just keep your eye on how the market is moving during this time. It’s better to segment a sector and then check out its movement. Understanding the factors that affect the change in a specific industry will help you make a better decision.

6) Take Small Leaps Forward

Once you start making a profit, don’t make a mistake of making a huge bet. But, it’s not wise to always stick to a small amount. The best way to scale your trading profit is by slowly increasing the trading amount. It’ll let you learn while you’re still making money from trading.

7) Do Not Rely On Others

Beginners often tend to rely on other traders’ tips for making their move. Sometimes, it might work out, but understand they won’t be around to instruct you of every step. You’ll be in a dilemma of when to exit the trade. It’s better to do your research instead of shadowing others.

Information in the trading world is dynamic. The only person responsible for your profit and loss is you. Conduct your research, analyze your trade, and make a move when you feel it’s appropriate. Relying on others will only make you a novice, and you won’t see any improvement in your future trading.

Final Thoughts

Cementing your position in a winner category takes effort and time. Spread betting can be profitable if you know the game in-depth. Following the tips mentioned will help in the starting phase of the trade, but you need to keep on learning and experimenting over the period of time to profit from it consistently. Have you started trading? Did this article help you?