General rules of winning in spread trading

When learning about spread betting, if you read enough, it will not take long to hear the phrase that you should ‘cut your losses short and let your profits run’ and then you will make money. Although this may be one of the most common phrases in spread betting it is certainly not the only one, so here are a few more general rules to help you win in the world of spread betting:

•    Stop losses – all good advice on spread betting should include making sure that you use a stop loss. Good advice would include applying a stop loss of around 8 – 10% from your entry point in order to limit your losses
•    Use guaranteed stop loss – an automated and guaranteed stop loss will prevent you from changing your mind. Check with your spread betting company because not all offer the guaranteed stop loss facility and if they do, they may charge a flat fee or a percentage. Dependent upon the size of your trade, choose the one that is most cost effective for you and review regularly
•    Avoid the temptation of averaging down or adding to a losing trade. Consider instead letting a profitable trade run and adding to that instead.
•    Of course the golden rule of all – never use money for spread trading that you cannot afford to lose!