Should Stop Losses or Guaranteed Stop Losses be used when spread trading?

As with all areas of betting, there is no simple answer to this. This is especially true of high risk activities such as financial spread betting. If you are regularly involved in spread trading you may be in two minds whether it is worth using stop losses or guaranteed stop losses when trading spread bets.

The truth is that guaranteed stop losses can be very costly to use; you pay for these stop losses in advance whether they are actually needed or not. However, if you are trading a large position, or if the market is volatile, you should really consider the benefits of using guaranteed stop losses.

There is really no right or wrong answer to which stop loss you should use, the main thing to bear in mind is that stop losses in general are highly beneficial to many spread traders. Otherwise, the trade in question can easily get out of hand and you could end up losing huge amounts of money. This really is the most sensible mechanism to use in order to minimise the potential losses from the bet.

Many people have lost nearly everything due to a lack of risk management on just a few trades, so always remember, it is not which stop loss to use, just make sure you have one. If not, you should be prepared for all eventualities.