How to Spread Bet

The 1st rule is - carefully.

This may sound trite, but it merits attention. Many more people lose money Spread Betting than make it, and while there are Spread Betting millionaires, there are also many Spread Betting disaster stories. Hard figures are difficult to come by (understandably), but figures bounced around go as high as 90% failure rate.

If you have never done any sort of trading before, Spread Betting is probably not for you - at least not yet. If you've ever had gambling issues, Spread Betting is definitely not for you. It is generally worth having some market knowledge - whether that is stock markets, or foreign exchange - because you will need to have some basis on which to chose a bet.

Pick a Broker 

To Spread Bet, you will need a Spread Betting company with which to trade. Better, you might want to have two - and this is quite a common practise. Spread Betting companies set the spread on a share or currency, and some will offer 'tighter' spreads than others, and at different times, so it is worth keeping your options open and your financial eggs in more than one basket.

There are now many companies offering spread betting services, and all are vying for your business. This should tell you something though - and it's worth remembering - more often than not, the real winners with Spread Betting are the Spread Betting companies themselves. IG Index for instance turned over £123,440,000 (yes, that's a hundred and twenty three million!) in 2011, with pre-tax profits of £67M. City Index and CMC Markets show net worth of £50M and £72M respectively.

Read up on the Subject

Don't treat Spread Betting as a game - treat it like a very dangerous journey, such as climbing Mount Everest. If you were going to make such a journey, you would train - read up on other people who had attempted it - and failed as well as succeeded. You would learn from their mistakes and equip yourself with tools that would help you succeeed. Set out carefully, knowing where you were treading, and don't kid yourself it's ok if you get in trouble. Always stay roped to a safe place, and make sure you can get back if you need to.

Now that analogy is squeezed dry - have a search on Amazon or the Book Depository for some good books on the subject. This might sound ironic coming from an online resource, but the truth is once you have bought a book, the author (and publisher) have made their money on the sale and their motive is to educate (and maybe entertain) you. Many online resources are simply geared to get you to sign up for a service and avoid talking about the down-sides.