Financial spread trading tips for beginners

When you discover the exciting world of spread trading and the profits it can bring most people rush to briefly read what it is because they are so keen to start trading.  All the best books and courses will tell you this is not how to make money and in fact is a sure fire way to get your fingers burnt and declare spread betting is just glorified gambling.

Spread betting can be very profitable but it is not a get rich quick scheme. You need to learn your market in order to make those big profits.

There are however a number of tips and facts offered by most professional and successful spread traders so here are a few points to take note of:

• Research properly: you must be aware of pending announcements that might affect the market price before you trade.  So for example, before spread betting on Lloyds TSB or HBOS you should have been aware of the potential buy out.  Before opening your trade, you must have calculated the risk to avoid losing money quickly

• Only use money you can afford to lose: this is an old adage in any sort of investment but it becomes more important when you are spread betting or making trades where you could lose quickly.  If unsure, try paper trading for a while or save up before you start. Don’t spread bet to pay off debts, it is a better idea to paper trade whilst you pay off debts then you can do financial spread trading when you are sorted financially

• Start with smaller trades: never make large trades when you are a beginner. You need to look after your capital. The majority of spread betting companies will let you spread trade with as little as just 50 pence per point