How much should I bet per trade?

When you start spread betting, and even once you’ve been doing it for a while, one important decision to make is how much to bet on a trade.

If you follow the principles of most successful or professional spread traders then as we advised in an earlier article, you should have a written money management plan that you stick to.

This involves deciding how much capital you are using as your spread betting fund, which should be money you can safely afford to use. From there, you need to decide how much you will use per trade and make sure you use that amount per trade no matter how confident you are in it. Once you find yourself in that enviable position of sitting on a winning trade in a winning position then of course you may wish to add to it but when you open a trade it should be with this set amount.

Deciding that set amount will depend upon the size of your capital fund firstly.  Imagine that you are splitting the fund into units. If one unit is 10 per cent of your fund then it would take only 10 losing trades to lose the lot and that isn’t a nice position to be in.

However, if you split your spread trading fund into something like 0.5 per cent per trade then you would need to have 200 losing trades in a row to lose everything. So, assess your fund and choose your plan wisely – and stick to it.