Financial Resource

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Financial spread betting was first started at London in 1970’s. Now a days the popularity of the financial spread bettingis increased.The followings are the major attractive features of financial spread betting which will answer your question “why do I choose financial spread betting?”

Financial spread betting is a high leverage investment tool.

Financial spread betting can be traded daily rather than waiting for days to be matured.

Both positive and negative movements of the market will give you profit.

Losses can be controlled using stop loss.

Can invest for short term or long term.

Can be started with low amount.

Financial spread betting is tax free.

What to trade?

In financial spread betting one can trade huge number of indices, currencies, and shares. Currency and indices trading are more attractive.

How to trade?

For successful spread betting , the financial spread betting procedures need to be understood by the investors. Financial spread betting tools can be indices, currency pairs and single shares move up and down. Spread betters can bet for any movement positive or negative. If the financial spread betters predict tool/market will go up the order should be buy if they predict it will go down order should be sell. So if the spread betters give the buy order they will make profit when the market go up of their buy price. If the spread betters give the sell order and market go down then they will make profit. When the movement of the tools/market is opposite of above the investors will count the losses. It means if investors give the buy order and market/tool go down or give sell order and market go up spread better will have losses. Spread betting size is also important. It causes the potential of the order. Bet size is the cost of the every point movement of the investment tool(index/share/currency pair). For example if spread betters give buy order at the level of 5000 on ftse 100 index and it go up at 5010. The profit will be (5010-5000)*spread size. So if the investors choose spread size the profit will be for this order , unlikely, if the spread better choose the spread size the profit will be 0 for the same order. It is also applicable in case of loss. The spread size depends on the minimum margin requirement for the order. Minimum margin requirement is the amount of fund needed for the minimum order of the tools. If the minimum margin requirement for the ftse 100 is the spread betters will be able to choose a spread size of 10 if he has 0 in his account .The spread size can be $ 1000 if spread betters have 000 in his account. Minimum margin varies with the brokers. To control the losses spread betters can use the stop loss option. When the tools reaches on this level order will be automatically released and will have a loss. Spread betters can also choose limit order when they are not sitting before the platform. When the tool will reach the limit level order will be released and the profit will be added into the account. To understand the movement of the tool investors can use the chart provided by the broker’s trading platform.

To do the financial spread betting first of all you have to select the tool to trade. Trading one single tool is good for the investors. To start financial spread betting the major steps are as follows-

1. SELECT THE TOOL

First of all spread betters need to select a tool to trade, for instance, they can choose a index (ftse 100) or currency pair (GBP/USD) or single share (ITG). Selecting only one tool is good to concentrate on and for the beginners may be obligatory to control the losses.

2. UNDERSTAND THE TOOL

After selecting a tool investors will go for collecting all information of the tool. For example if they select ftse-100 they need to know the all shares forming this index and also about the companies.

3. SELECT A BROKER

While selecting a broker investors have to compare the features of the brokers. Remember the different between the selling price and buying price is the fee to the broker in every order. Financial Spread betters need to look for less difference between selling and buying price. A broker is good which give good customer care service as investors need to contact in interval. The minimum spread size and margin requirement should be considered and searched the brokers who give opportunity to trade with lowest margin and spread size.

4. UNDERSTAND TRADING PLATFORM

If the spread betters are trading online, it is very important to understand the trading platform of your broker. It is better if the broker give the opportunity of a demo account. While understanding a trading platform spread better need to know-

How to sell and buy?

How to select stop loss?

How to make limit order?

How to close the order?

The above are the obligatory the additional feature can be learned such as price level signals and so on.

5. UNDERSTAND EVENTS AND FACTORS THAT CAN AFFECT THE TOOL

To understand the factors and events can affect the tool understanding the tool is important in second step. For example in case of ftse 100 the news which can affect the financial sectors will affect the ftse 100 because a big number of financial companies are included in ftse 100. Ecomomic data realesed every day have strong effect on spread betting decision.

6. SELECT TRADING STRATEGY

To trade success fully every spread betters need to have their own strategy. They can trade in short or long term basis. Even in taking a spread betting decision they have to decide how long they will wait for the tool to move to there interest. More example they can do it selecting the stop loss level in the order.

7. START TRADING CONSIDERING THE CURRENT EVENTS AND NEWS

Investors after above steps can start trading, but they need to trade considering the current news and events not otherwise. We recommend to subscribe our RSS feed for blog and news updates.

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