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Spread Betting Tips Spread betting is a risky occupation, like any type of gambling. The specialist companies, like City Link, that offer punters an opportunity to try and play the markets are keen to point out the dangers that the unsuspecting gambler faces. Many companies offer the opportunity to play the markets with very small sums of money until the punter has gained a bit of experience. So what are the rules that you should abide by when spread betting? Obviously you have to be prudent, make sure that you know your market well. There is the opportunity to bet on hundreds of different markets, companies and commodities, and it is best to keep it down to just one or two and to try and become an expert in how these few work, any historical trends, and how they are related to other financial entities. Another important tip is that you must manage your money carefully, whilst this might seem like obvious advice, no matter how confident you are in the future movements of the market most experienced spread betters never place more than 2% of their back at risk on any single trade. In practical terms then if you have a bank of £4,000 you should be prepared for a maximum loss of £80. Most companies offer the possibility of stopping your trading at a certain loss. So if you’re betting of the FTSE rising, and you wager a stake of £1, your trade is closed automatically if the index drops by 80 points. A further important piece of advice is to monitor your losses and wherever possible to cut them fast. If you sit and watch as you make a large loss, there’s no point in thinking that the market will rebound or head in the direction that you want it to before long. There is a strong chance that it won’t, and for that reason, if you’re making a loss, it’s best to pull the plug. Finally, don’t panic if you start to make a profit. Many beginners hold onto their losses hoping that the market will turn around, whilst many cut their profits before the advantage has been fully taken. If you take a sensible, well researched bet and you’re up by several hundred pounds, many beginners take the money, when if they’d waited for just a few more minutes their money would have doubled again. There is nothing wrong with getting out whilst you’re ahead, but you can ride the profit until the moment that it turns and then get out, if the market is still rising, there’s no reason to get out. Of course, small profits and small risks are a better way of making money than large risks – particularly for the uninitiated. Don’t get carried away with your bets!
Article Source: http://www.content.onlypunjab.com
Andy Angelo is author of article written on Spread Betting & Spread Betting. For more information, please visit :www.finspreads.com
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