Spread betting at leading betting firms is an increasingly popular form of investment for traders in the UK. This is because of the tax free status that betting receives in Britain. With this increase in popularity comes an influx of inexperienced spread bettors and it’s for all of you newbies that we’ve written this Dos and Don’ts of Spread Betting guide, which offers common sense advice that should steer you on the right track.
Spread betting can be a lucrative way to profit from your investments but, as profitable as spread betting can be, it can be equally as expensive when things go wrong and you can lose a huge amount of money in seconds! Therefore, you should take heed of the following tips for successful betting.
Do thoroughly research the subject of your bets, typically the financial market that you’re gambling on the future of. This way you avoid any nasty shocks that everybody else already knew about!
Do constantly observe your positions (bets). If a market turns, you can lose lots of cash in a short period of time so you should always have one eye on any open bets you currently have.
Do set limit orders to prevent you losing profits. For example, if you bet on the market value of ‘Company X’ at 7,256 and you set a limit order at 7,400, you would automatically close your bet once the value of ‘Company X’ hit 7,400, securing you profits before the value falls again.
Don’t bet with money you cannot afford to lose. This ‘no brainer’ should be employed to ANY form of risk management or gambling.
Don’t place bets based on any of the following:
- Hunches – If you don’t know why you know, you don’t know!
- Superstitions – What somebody believes very rarely influences the market value of companies or currencies that you place bets on.
- Emotional Decisions – Betting with high emotions can be phenomenally self-destructive. You will place irrational, poorly thought out bets, as opposed to placing calculated bets in the right frame of mind.
Don’t bet on too many markets. Concentrate on a handful of markets that you can observe thoroughly, allowing you to make much more informed decisions.
So, armed with this useful set of tips, you’re ready to place more informed spread bets.