5 Steps To Spread Betting Success
Succeeding in spread betting isn't a given, even for those that work hard at learning their craft. The markets are highly unpredictable beasts, and with the added pressure of highly leveraged returns and losses, it can often seem like an uphill struggle to make any real progress. While blueprints to success are impossible to definitively draw up, there is nevertheless a proper path of projection you must follow in order to give yourself the best chance of building a successful trading portfolio. With significant rewards waiting for those that managed to crack the spread betting code, following these 5 steps to spread betting success can be your best chance of making it as a spread betting trader.
1. Read, Research and Learn
This is an out-spoken path to succeeding as a spread trader, but it's one that shouldn't be underestimated in its importance, helping to craft you into a successful, accomplished and knowledgeable trader. Read absolutely everything to do with spread betting as you possible can - from the theory and sheer background information through to strategy guides, tips and analyst thinking. The more you read, the more information you will be able to draw on during your trading endeavours, and the more likely it is that you will be able to trade successfully over time. The same goes for research - by immersing yourself in the markets and in spread betting know-how, it's far more likely that some of it will stick, and help to shape your perceptions as to how to go about successfully trading.
2. Choose A Solid Spread Betting Broker
Perhaps an understated step on the ladder to spread betting success is getting the right broker behind you from the start. Chopping and changing between spread betting providers until you find the right one is not advisable, and can be a costly and confusing process, not to mention a drain on your time and energies. Remember that signing up for a broker requires you to confirm your identity and go through credit checks - it is not like signing up for a social network account, so limiting the number and frequency with which you sign up to different brokers is an important facet of successful trading.
Compare the experiences of other traders who have gone before you, and look for reviews, ratings and comparisons between different brokers in order to settle on the right one for you. Remember to look at both pricing and usability - after all, a low cost trading platform with limited functionality is a less attractive option than a more rounded platform with a slightly more expensive broker.
3. Develop A Trading Strategy
Having read tomes of spread betting literature from a variety of mediums and choosing a reliable, reputable broker you're sure you can work with, it's time to develop and implement a spread betting strategy of your own. While trading strategies can be flexible and ultimately change entirely over time, learning and practising one particular strategy can be a great way to build up a consistent trading profile. By far the best testing ground for strategies is through a demo account with your broker. This will enable you to access their trading platform, but for virtual trading stakes, enabling you to try out your strategy on real-time markets without the real-time risk. When you're satisfied you know how to implement a given strategy, then you can take the time to get out there and start making profitable trades for real.
4. Build Up Your Capital and Expertise Over Time
Becoming a successful spread betting trader is a marathon, rather than a sprint, and to begin with you should veer away from any form of significant risk. As a general rule of thumb, you should absolutely limit your exposure to any one position to no more than 10% of your trading capital. Anything beyond this represents too significant a risk burden, which can hamper your ability to progress as a spread betting trader.
Making small but sensible trades is the way to play it if you're looking to achieve success. Of course this doesn't vitiate the risks, but by taking it easy and building up your capital pot first of all, you will both strengthen your ability to invest more freely in the markets while helping to gain the lessons from experience that will stand you in good stead throughout your trading career.
5. Take Cautious Risks
Trading is a business of risk, and there comes a time when it's important to push the boat out a little further and take the risk on larger transactions. By the time you've experienced both winning and losing at lower levels, you should find yourself becoming a much more informed, much more knowledgeable trader, and this is most certainly a good thing. When you've got the trading capital and the knowledge of your past trading activities behind you, taking measure risks is the next order of business, enabling you to start making money as a spread betting trader. Ensuring you never lose sight of the basics, you should know when you're ready to embrace the heightened risks of larger stake sizes and more frequent transactions, and assuming you maintain your focus, you should be able to land more frequently profitable transactions than your losing positions.