Three Tips For Rookie Spread Betters

By Author: Vickey Nhep
Total Articles: 6
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When you invest money, then if you''re going to realise your long term goals creating a portfolio from stocks and bonds is very important. However, you may also want to use a section of your portfolio for more adventurous trades through spread betting. If you''d like to set up a spread betting account, take a look at CMC Markets.

With spread betting you trade on leverage to make potentially faster gains (although this comes at a greater risk) and you can spread bet in order to ''hedge'' more traditional trades. Because of the risks involved, it''s important you research spread betting before you become active. Here''s three tips for rookie spread betters.

Start Small - Too much money is lost by people who simply don''t know enough about what they''re doing. One of the worst things you can do is bet too much money in early trades, only to see your portfolio devastated by a few mistakes.

It''s important that you start small and don''t make large risky bets during the first few months of your account opening. A maximum bet of ?1 per point is a good idea at this stage. Using this strategy will certainly put ...
... you in a better stead than many other spread betting beginners.

Use a Simulator - Even if you''re an experienced stock market investor, the interfaces of spread betting can get complicated. To make sure you''re up to speed on using the interface, it''s a good idea to open a simulator account. After a few test runs it should mean you don''t make as many mistakes.

If you do well on the simulator, it''s important not to get carried away and believe you''ll mirror your success by using a real account. A simulator should help you understand the ways of the spread betting interface, rather than a training exercise on how ''good'' you can be.

Stop Losses - Using stop losses might seem conservative, but it''s an important tactic to employ, particularly early on. It can be frustrating when a stop loss prevents a higher move in a positive direction, but they can also save your account from dipping 10%-20% in a single trade.

The big danger of not putting a stop loss in place is that just an unfortunate move in the markets could do some real damage to your wealth ? and it could even end up with you owing the account provider more money than you started with. Vickey Nhep is an expert in personal finance. This article was inspired by CMC Markets, a company that offer innovative cfd and spread betting solutions.