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Spread Betting Tips and Strategies

Read more about what Forex trading is, how to trade Forex and discover a range of tips and strategies.

Spread Betting Basics

01Spread Betting Basics

tips_and_strategies_discipline

Discipline

Spread betting tips for beginners usually start with one word – discipline. Experienced and successful traders operate a strategy and stick to it. This ethos is important for trading success, but no guarantee of profit – the market can always move against you.

tips_and_strategies_research

Research

Time spent in reconnaissance is seldom wasted. Likewise conducting research is important in spread betting. Past performance is no guarantee of future returns, but traders should always try to understand what’s been steering the price direction up until the point they choose to enter the market.

Spread Betting Risk Management Strategies

0​​2Spread Betting Risk Management Strategies

Targets

Setting a target and managing risk is also important. For example a common approach is to apply a 3:1 risk-reward ratio. In other words, a profit target should be three times the amount you are prepared to lose. If you’re buying the UK 100 at 6,000 with a 300-point target, this strategy would entail setting a stop-loss at 5,900 and limit order at 6,300.

Stakes

Risk management also impacts your position size. Many traders would never risk more than 2% of their stake, but it’s largely down to personal preference. Risk is about what you are comfortable with, not what someone else thinks.

Losses

Too many traders cut winners and let losses run. A successful trading strategy needs to see this reversed – cut the losers early and let the winners run and run. This, of course, is harder in practice than in theory.

The most important tool in managing risk is the simple stop-loss. Stops mean you can set the maximum level of loss you are prepared to sustain for the trade. Stops can act against the trader – if you set it too close to the entry point you may get stopped out before your spread bet has a chance to make a profit. But triggering a well-placed stop is better than losing more than you have in your account.

For more on spread betting tips and strategies, head to the trading education for the latest webinars and analysis.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when spread betting or trading CFDs with ETX. You should consider whether you understand how spread bets orCFDs work and whether you can afford to take the high risk of losing your money.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.