Milking the Cash Dow

Making a killing on the Dow takes skill and practice. The ‘skill’ aspect arrives after the practice of course as with any pastime once you have practiced the more skilful you become. The same can be said of spread betting.

Spread betting the daily Dow Jones can bring great returns if you apply some simple rules, general ‘dos’ and don’ts’ and of course practice. The ideal situation to have is for you to call the rise or fall of the Dow correctly and make a good profit on the amount of points you have gained either way. Calling the direction of the Dow takes analytical skill, practice and luck.

Remember that you have to pay for your spread which means that although you called a rise and indeed the Dow rose by say 20 points you actually only get a return on 14 points. This seems simple and easy to follow but to the novice (who may think they’ve made a nice 6 point gain) it can be a harsh lesson to learn.

Another factor to take into account is the SB companies’ bias. What happens here is when you think you have a loss of 6 points (i.e. the spread) when you want to close but in fact, what some companies do, is change their bias to follow the trend of the index and adjusting to what other companies are quoting.