The beginners guide to financial spread betting step-by-step instructions and winning strategies

If not, browse Amazon and look for beginners trading books. Key advanced books to invest in are Douglas 'disciplined trader' for the psychology of trading; John Murphy for technical analysis; for currency trading there's for instance Raghee Horner and Kathy Lien's books. A damn good read about correcting your thinking and size of each trade Hardcover by John Murphy. Don't bother wasting your money on 'Guru' books written by so called experts who have made it big and are selling you the 'secret' to getting rich.

Those books are crap and not worth the paper they are printed on. The only reason these guys are writing books is because they didn't make it as traders. And don't buy expensive system packages as you will not know how to make them work, and anyway they never work as expected. Regarding trading platforms Simon, don't bother spending money on big expensive programs and data provision services. These do not make you any better a trader and all the software you need is out there for free.

Regarding technical indicators don't search for the 'holy grail' - it's not out there unless you manage to build it yourself. To start with keep charting simple, and use the free and cheap packages that spread betting companies typically offer to get you started - Ayondo offers a decent demo account; so use this as a sandpit for your strategies until you find a system that works for you. Only consider the expensive stuff once you have realized what you are doing - but, by then you will realize that it's best to keep it simple and you will probably figure out that don't need expensive systems and tools.

Most people who attempt a trading career fail and it's not because of what you think. Trading is not really rocket science but it does involve some severe noose. Develop in yourself discipline, log a diary of all your trades, mistakes, when you do something right, anything less and you will fail. Begin trading for a long period on a demo account before risking your money but treat this as though it were real capital. Oh, most important of all - read some stuff on money management and risk management.

Succeeding at this game is not about being clever with setups, but is mostly about setting correct stops, managing the trade in motion or setting definite targets , getting your exits right i. You need to plan your trades and be disciplined enough to manage according to your plans and once you have mastered that you will need to learn when to change the plan These dealing costs can make a big dent in profits and increase your break-even point.

Because financial spread betting is leveraged — you are not buying the underlying shares — capital outlay is much lower than in traditional share trading. Think of it like a mortgage on your house, you get to buy an asset with just a percentage upfront. Short-term bets of a few hours or days can be a good way of taking advantage of sudden shifts in price. Many traders like to place short-term bets on market indices such as the FTSE or the Dow Jones, where movements are often the result of macroeconomic trends.

When betting short-term, it is advisable to keep a close eye on the way the market is moving, so that you can get out at the right time. Automated share price alerts make this easier and now most financial bookmakers such as IG Index have Apps which allow you to check prices on the go from your phone or iPad.

Financial Spread betting in the longer term — weeks or months — allows you to take a view of the fundamental strengths of individual shares, without worrying too much about short-term price fluctuations. By using a longer dated contract you are not as focused on short term moves.

Spread betting is similar to share trading, although it is important to use stop-losses to help manage risk by limiting the amount of losses you can make on a single trade. When you place your bet, you specify a lower limit: if the share price falls to that limit, the bet is automatically closed and you will suffer no further losses. Anyone with experience of share trading can use the knowledge they have gained when spread betting.

Also make sure you use money management and only place a percentage on your trading account on any one particular share.

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Step Three: Buy a log book or use an excel sheet to record your trades. A hard-back book of plain lined paper is fine. Even an excel sheet is good. Make columns for date, time, details of trade, buy and sell prices. You might also like to add columns for deposit factor, spread…etc but these are not essential.

Why is it important to record trades? All conversations with your spread betting provider are recorded on tape. If you give a clear BUY instruction, and they SELL instead, then the date and time will allow them to locate the recording and check who has made the error. During all my dealings I have never known them to make an error, but it does happen.

They take thousands of instructions every day. I am always very careful to repeat my instructions, and have them repeat back to me. But more importantly the diary allows you to monitor your wins and losses. It allows you to keep track of how you are doing and to remind yourself how much you have lost! If, like me, you intend to clock up substantial gains, you will need this in case the Inland Revenue asks for a report on your income yes, sure I know that currently there is no requirement for a UK resident to declare spreadbetting gains but they might still ask you about that big transfer you received from a spread betting company!

Obviously your spread betting company will send you a copy usually same day by email of your trades, and you should file these carefully in a ring binder. They are your evidence! Step Four: Decide which market s you are going to trade. If you are a beginner, then start with one index, say the FTSE You can get up to date information on the index regularly and track the index yourself. This is important. March Cocoa could be doing all sorts of exciting things, but can you access the hour-by-hour or even the minute-by-minute information?

Step Five: Decide on a strategy. In all successful spread betting, the winners have a strategy, the losers bet haphazardly, in a random fashion, guided by superstition. Step Six: Make some dummy trades. Check prices and make dummy trades on a demo simulator.

Most spread betting providers nowadays offer demo accounts — Ayondo and Spread Co to name two. This way, you can get some experience without risking any money. It is unreal and is a surprisingly long way from making a real bet! Many people have been fooled by making money on paper trading, only to find that their emotions get the better of them when real money is at stake.

Paper trading is very different and I would say if anything gives you a false sense of security before the real thing, the best introduction to betting on indices is an early and painful loss, the most dangerous introduction is a long and reassuring paper trading learning period followed by some early success, as that will lure you into the hole.

Step Seven: Make your first trade! That way, you will not win much or lose much. I want you to understand the difference between placing a real bet and paper trading, talking or reading manuals! There is nothing like the thrill of your first wager and you will instantly understand why spread betting can be so addictive! You are an amateur, but so was everyone at one time. Not anymore. You would now be hard-pressed to find any other form of trading that allows such a scale of return and has such wide appeal.

The popularity of spread betting has increased massively over the last few years, with thousands of new traders entering the market every month. And, whilst the basic principles of spread betting are simple, there is jargon to overcome and some important lessons to be learnt if the novice trader is going to make the most of the opportunities available.

However, these huge opportunities do carry some risk and this book describes how it is vital that traders manage those risks and understand how to minimise them wherever possible.