1. Spread betting is more accessible for new investors than CFDs, but less cost-effective due to the wider spreads (which is usually more than compensated by its tax-advantaged status).
2. Open up a DEMO ACCOUNT with a spread betting firm such as Capital Spreads (£10,000 to practice with) or ETX Capital ('Player account'/simulator, using £20k 'virtual money', plus free 'beginners guide' book)
3. You will get £10,000 to play with. Trade with that virtual £10,000 as if it was your hard earned cash, and do so for at least 2-4 months with your theoretically 'winning' strategy.
4. Start with slow paced UK FTSE 100 stocks, preferably expensive blue chip stocks that are very liquid. Indices are too random for newbies to guess, US stocks (most) are too volatile and will wipe you out in no time, and also Forex is too volatile beginners.
5. When ready to start spread trading for real money do keep in mind that companies can let you open an account with £200, but I would suggest a minimum of £1000. This will then enable you absorb more losses than with £200 or £500, if you keep your bet size to a small fraction, 2% max risk is ideal but with a small account I would use 5%.
6. Use a financial bookmaker that quotes firm prices on a screen. Start initially with a maximum of five companies. Absolutely no shorting at this stage (shorting companies is harder psychologically).
7. Don't make any 'in-running' bets (i.e. identify opportunities while the market is closed). Decide in advance the level you will trade at and try not to give into temptation and buy too early.
8. Before you open each spread bet, write down your plan: why you've taken the decision, and what your exit strategy is. If you decide not to open a position after you've been considering it closely, write down the reasons for that, too.
9. Place your bet only when you think that the underlying financial instrument will move up or down sharply.
Courtesy: http://www.financial-spread-betting.com/Spreadbetters.html
2. Open up a DEMO ACCOUNT with a spread betting firm such as Capital Spreads (£10,000 to practice with) or ETX Capital ('Player account'/simulator, using £20k 'virtual money', plus free 'beginners guide' book)
3. You will get £10,000 to play with. Trade with that virtual £10,000 as if it was your hard earned cash, and do so for at least 2-4 months with your theoretically 'winning' strategy.
4. Start with slow paced UK FTSE 100 stocks, preferably expensive blue chip stocks that are very liquid. Indices are too random for newbies to guess, US stocks (most) are too volatile and will wipe you out in no time, and also Forex is too volatile beginners.
5. When ready to start spread trading for real money do keep in mind that companies can let you open an account with £200, but I would suggest a minimum of £1000. This will then enable you absorb more losses than with £200 or £500, if you keep your bet size to a small fraction, 2% max risk is ideal but with a small account I would use 5%.
6. Use a financial bookmaker that quotes firm prices on a screen. Start initially with a maximum of five companies. Absolutely no shorting at this stage (shorting companies is harder psychologically).
7. Don't make any 'in-running' bets (i.e. identify opportunities while the market is closed). Decide in advance the level you will trade at and try not to give into temptation and buy too early.
8. Before you open each spread bet, write down your plan: why you've taken the decision, and what your exit strategy is. If you decide not to open a position after you've been considering it closely, write down the reasons for that, too.
9. Place your bet only when you think that the underlying financial instrument will move up or down sharply.
Courtesy: http://www.financial-spread-betting.com/Spreadbetters.html
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