Basic rules of spread betting

When it comes to spread betting, although it may not be rocket science and many people can learn it, there are some basic rules of spread betting that should be followed to help ensure you make some money.

•    Placing the trade – decide upon your strategy and when you see the signal, move immediately. You might hear the phrase ‘trade what you see, not what you think’ and this is true. Avoid becoming emotionally involved. If you feel emotionally attached and are losing sleep on a trade then you are spread trading money you cannot afford to lose
•    Stop losses – the stop loss is mentioned in many references on spread trading, especially in any notes for novices, because it is so fundamental and important if you are to survive and make money with spread betting. Be sure you understand it and make sure you set an automated stop loss on every single trade without exceptions. Even better, if you see you are wrong then cut any losing trades short
•    Watch the capital – when you start to spread trade, decide on an amount to invest that you can afford to lose. That’s the golden rule, be sure you can afford to lose or you will become too emotionally involved. Avoid putting the profit back into the market and use only a small percentage of the pot at any time.