Getting Started with Spread Betting

If this is the 1st thing you have read about Spread Betting, I'd suggest you read a little more around the subject before 'giving it a go'. Spread Betting is a geared betting facility, and unlike traditional trading or other forms of betting, the losses can exceed your initial investment. Read more on [the risks of Spread Betting].

However, if you have decided to get started with Spread Betting, then this is a good place as any to start.

  1. You will need some money! And not just any money - money you can completely afford to lose. In fact psychologically, you should 'lose' that money the instant you deposit it to your Spread Betting account. And if you can't afford to lose it, do not, under any circumstances, put it in - particularly if you are chasing a loss.
     
  2. Second you will need a Spread Betting company to trade with. Read more on [choosing a Spread Betting company]. It's worth picking a company that is established and that you feel you trust. There are many [Spread Betting consipiracy theories], and whether or not they are true, that can mess with your mind, and you will need to be cold and unemotional with your trading if you are to be successful.

  3. Thirdly, you will need a strategy. Every person will have their own, but it's good to know what you are setting out to acheive at the start, then stick to it. Decide what constitutes an acceptable loss (5% for instance?) on an individual position, and decide what sort of realisitic profit you are looking to make per transaction. What will be your strategy on staying in on a profitable position? Write it down!
     
  4. Set your limits. Spread Betting is a system that allows you to be exposed to more risk than actual money you have deposited with the company. If you take advantage of this, you can be liable for greater losses than you can necessarily afford, and the Spread Betting companies can (and will) legally enforce such a loss. There are plenty of horror stories of people losing their houses or life savings because they over exposed their positions and couldn't afford the loss. Decide what you risk strategy will be - it might be helpful to use our [Spread Betting exposure calculator].
     
  5. Start carefully. It's a well known fact that many people 'burn out' of Spread Betting due to 'over-trading'. One of the dangers of Spread Betting is that you can see your profits and losses in real time - and there are big shiny buy / sell buttons that are just crying out to be pressed. Remember that every time you trade, you will have to recover the spread itself before you are in profit. If you don't understand this - don't start just quite yet, and read more on [What is Spread Betting].
     
  6. Have fun, be happy! Often, people fail in Spread Betting because they get too emotionally attached to what they are doing - or they get greedy, or can't bring themselves to admit a loss. If you treat it like a game, try and emotionally detach yourself from the size of the figures (while being sensible of course), you stand a better chance of not fooling yourself into big losses.