Stop press, stop loss

If you’re a novice at spread betting then it might be wise to open up a simulation account first. This will allow you practice trading without actually putting up, losing or gaining any money. You will be able to see how the market can be your downfall or your saviour bringing you great gains for a small flutter.
However once you start to trade you are in the real world and can be expected to pay real money for trading. Of course when you make money you’ll be credited with it too and it can be a very lucrative way of using capital.

How can you play without getting you fingers burnt too much? Using spread betting sites with ‘stop loss’ facilities will help you. Stop loss facilities do exactly what they say, they stop the loss you are making at a designated point and close the trading. As an example you might be able to stand a loss of £2000, your contract stipulates that you will only owe that amount should the spread betting account move against you.

This is a good way of protecting your capital when you start spread trading. You can of course also move your stop loss to lock in on a profit should the market turn in your favour. For instance if you’ve bought a stake in a commodity at £23.00 and you have put a stop loss on £21.00 (because that’s the point at which you want to cease trading and cut your losses) if the market increases then you can change the stop loss to £24.00 making sure you lock in on 100 point profit on that trade.