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Spread Betting
Learning the Ropes


On this page is an article about Spread Betting, entitled "Learning the Ropes".



In the wake of the recession one would have been forgiven for thinking that the spread betting phenomenon would have been derailed. The stock markets, and particularly the people who trade on them, took a battering in the media and for a short period were public enemy number one. The actual impact of the 'credit crunch' couldn't have been more different.

Whether it was because the markets rebounded surprisingly quickly and were back to making money, or whether it was because more people became aware of the sometimes hypnotic movements of the market, the growth in spread betting in the last few years has been astonishing, and these people have been drawn, more often than not, by the potential of making money.

And therein lies the biggest danger to new spread betters. Media interest, and of course the incredible profit figures of the banks, have led people to think that making money out of the markets isn't nearly as difficult as it is. As many as ninety percent of new traders lose all their money in short order, and this is mostly through learning a few rules and then plunging straight in.

Spread betting is not easy, and whilst you can learn the basic rules in a few minutes, it can take years to understand how all the subtle forces involved in the markets play off against each other. Most spread betters, however, probably don't have years to learn, or at least don't want to spend years learning.

If you're new to Spread betting, the best advice is simply to take your time. Don't plunge straight in, make sure that you use the teaching resources that spread betting companies make available and if you have the opportunity, make the most of trial memberships where you can trade tiny amounts of money, or, even better, significant amounts of fake money.

With spread betting, the golden rule is not to chase money. Stick to the rules that you know, and if the markets aren't performing in the way you think it should, stop, re-assess and then choose another entry point, bear in mind what's happened before, but use it to shape your trades not to dictate them.


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