There are so many online stock traders today making untold losses and the reason is simple: they are too quick to get into trading right away despite their lack or limited knowledge of how the Spread Betting works. Here is some real advice on how to avoid such a mistake as a novice trader and determine whether spread betting is really for you.
Trade for free
Before you even think of investing your first quid, open a free trading account first. Why? Simply because you don’t pay for it and it is good ground for practice before venturing into the real world of trading. A beginner account puts virtual money in your pocket that you can use to start trading.
Trade any market
Even though it’s a free account, you still have access to all the assets available for trading like pairs, commodities, indices, and equities. You also have a free pass to using all the available market indicators to better price movements like Bollinger Bands, ADX, RSI or Alligator. Additionally, a free account presents the same conditions you find in real binary trading: rapid price movements, making losses, spreading your risks, making profits and so on.
Here is another great advantage; you have access to an unlimited number of markets still on your free account. You could choose to trade in the UK 100 in your morning hours and later on switch to Wall Street. There is the liberty to trade in any currency pairs you desire like the GBP/USD, AUD/USD, EUR/JPY, CAD/CHF or the commonly popular EUR/USD pair.
Reduce your risks
A free account has what you call a Guaranteed Stop Loss Order or GSLO, which is a ‘virtual button’ you can switch off when anticipating great losses. This feature allows you to close any position automatically if the markets are moving against your investments. You can close any trade that is doing badly at the specific time you instruct the feature. So, in this case, GSLO is your security against any bad investments, especially in highly volatile markets.
Switching to a Real Trading Account
Only switch to a real financial account when you have everything there is to learn about spread betting. And even then, it’s still important to have someone to guide you on how to spot the profitable trades from those to avoid. There are plenty of online spread betting accounts with available tips to guide you on your first trade with real money.
Begin with a standard account that allows you to bet in minimal stake sizes like 10p to 50p. You can make these small stake investments in thousands of financial markets in a day. This is the true essence of spreading your bet so that when you lose on one investment you still gain on another.
With your standard account, there is still plenty of access to day-trades, indices, currencies, shares or commodities. A new venture is in precious metals which are a rising commodity in the market today. You don’t have to own any of these assets but only bet on whether their prices rise or fall. This is what they mean by a put (betting down) and a call (betting up). This non-committing to assets also lets you move freely in and out of any market.
Another way to make sure you take the right path in trading is to work with a spread betting broker. You may have heard some very horrific stories about brokers swindling people, but that doesn’t mean there isn’t a decent, honest broker left in the market. To be safe always go with an established brokerage agency, like CMC markets, whose brokers are professionals with years of experience.
Starting out as a spread betting investor has its risks which so many people overlook and end up making losses. The trick is in always starting small and making sure you are learning everything there is to know about the trade. Start with a demo account that allows you to trade for free and learn faster before you invest your first pound. Also, utilize the services of online brokers and spread bet companies that have massive experience in the field.