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Win With OUR Expert Tips on all markets including FTSE Betting,
S&P Betting and Dow Jones Betting
WITH UNLIMITED Possibilities PROFITS choice, loss-limiting strategies and plenty of
excitement, financial spread betting has a lot to offer.
Betting on the movements of financial markets is one of the latest trends in gaming
(or gambling).
By opening up an account with a spread betting agency, the "man in the street"
can have a punt on the world's financial markets without having to actually get involved in buying
and selling shares.
Recently, PaddyPower one of the UK's leading online bookmakers open it's
online spread betting site at
www.paddypowertrader.com
and BetHiLo company at
www.BetHiLo.com -
sports spread betting made easy.
While financial spread betting offers the possibility of making amazing profits in a short
space of time, it is far from easy (if it was, everyone would be at it!).
It takes hard work, patience and discipline. That's because, as with all spread betting, it's easy
to lose money very quickly.
To help you, we've compiled these expert tips to help you get the maximum profit from
financial spread betting.
Work Out Your Maximum Potential Loss On Any Bet
The first step towards making money from financial spread betting is to learn how to prevent losing it.
With a conventional bet, if your bet loses, all you lose is your original stake. With spread betting
the losses (as well as the profits) can accumulate.
So, as well as thinking about the potential profits, you should carefully work out how much you
stand to lose if the bet goes the wrong way.
If it's a figure you know you can't afford to lose, reduce the size of your unit stake. Or,
simply obey the next cardinal rule:
Set a Stop Loss
This is a way to restrict the amount of money you lose to an affordable level. You simply work out
what the maximum loss figure will be, and terminate the bet if that figure is reached.
Remember, you're not being defeatist in setting a stop loss, you're being sensible. Unless you are
a true financial genius, in the long run you will have more losing spread bets than
winning ones.
The trick is to make sure the gains on the winners outweigh the deficits from the losers,
and using the stop loss method is a pretty good way of doing this.
Obviously, stop losses are useful if the market moves the wrong way. However, if a bet starts moving
in your favour the stop loss figure should be dragged up behind it.
This means that any gains won't be wiped out by any subsequent losses if the market begins to go the
wrong way again, thus "locking in" your profits.
See below for an example of how a dynamic stop loss works. The spread betting
firms (or companies) operate a number of stop loss systems as part of their service - use them.
By making sure bets that go wrong don't spiral out of control you'll stand a better chance of making
a profit in the long run.
Know Your Bookie's Rules
Lots of punters new to spread betting fail to acquaint themselves with the rules first. As a result,
they end up losing money when they need not have.
The best and most basic example is when a punter fails to appreciate the "tick"
(the minimum point movement in a market) applicable to their bet.
For example, the FTSE-100 Data moves in whole point movements, while the tick on the
NASDAQ market is one-tenth of a point The tick on some currency markets is even smaller.
It's crucial to appreciate this. If you place a bet thinking you're on betting on full point
movements when really the tick is for one-tenth of a point, you are actually gambling ten
times your intended amount.
Imagine you are playing for £5 a point and the market goes against you to the tune
of 20 points.
If the "tick" is a full point you've lost £100, but if it is one-tenth of a point
you've lost £1,000.
Spread bookies now have plenty of safeguards in place to prevent this kind of misunderstanding
occurring, but if you always investigate your spread bookie's rules before you commence betting,
these safeguards won't be needed.
Having so far looked at ways to restrict losses, let's now consider some methods that might be
employed to pull off winning bets.
Don't Think Too Far Ahead
Over the past three years Wall Street has provided some good examples of this.
In recent times the majority of spread bets made on the New York stock exchange index
have been losing ones.
This has been down to punters believing that Wall Street is due a massive fall. In forming this view
they have probably been looking at the medium to longterm picture.
Punters haven't been alone in taking this stance either - many financial experts have
done the same. Trouble is, the market has kept on rising.
Okay; judged by all conventional share buying rules Wall Street is massively overvalued. But punter
after punter has burnt their fingers through thinking the market would eventually come tumbling down.
Through selling the index, rather than buying, they have "done their dough".
They would have done far better jumping on the Wall Street gravy train if only for just a few days -
and pulling in some nice profits.
Equally, you shouldn't try and be too clever. Contemplating your navel over what a market might
do in the long term.
Example Of A Dynamic Stop Loss In Action
Thinking the market is going to rise, you place a "buy" bet on the FTSE-lOO at a quote
of 6500-6525 for £5 a point.
Since you always "buy at the high" of the quote, your bet is a buy at 6525
for £5 per tick.
So with each point movement above 6525, your profit, should you terminate the bet, is £5 per point.
You decide to set a stop loss of £400 (80 points) on the bet. In other words, if a future
quote moves below 6445-6470 the bet will be terminated.
Remember, with spread betting you sell at the lower end of this market - 6445, meaning you
lose £400 (80 x £5 is £400).
However, if the quote moves up to 6605-6630, the bet is 80 points in profit.
Here, you drag the 80 point stop loss up so that if the quote subsequently falls back to
6525-6550, the bet is terminated. If this happens, you break even (bought at 6525, sold at 6525).
If the quote moves up to 6700-6725 a potential profit of 175 points (£875) exists. Again, you drag
the 80 point stop loss up to lock in any profit.
Your new stop loss is set so that if the new quote falls back to 6600-6620, your bet is terminated,
giving you £375 profit (bet bought at 6525 and sold at 6600 is 75 points profit; 75 x £5 = £375).
This does not always lead to success with financial spread betting.
Instead, think short term, jump on the bandwagon and then try to jump off again with your
profit still intact. This brings us nicely to the next point:
Let Someone Else Have The Top Of The Market
Why? you may ask. Simple. Those who try to enjoy the very top of the market suffer far more chance
of having to endure the bottom as well.
In other words, when a bet has made a profit you are satisfied with, cash it in.
True, the market you've been playing might go higher still, but let someone else ride that train
- you can always get back on if it really looks like the trip is going on and on.
Again, consider those on Wall Street who have lost out. Eventually the market will turn and those
who have waited to take further profits will risk losing the lot.
Let them be the ones who suffer - don't let it be you.
Be Your Own Person
Generally speaking; all the big investors on the world's stock, currency and commodity
markets follow one another.
None of the big institutional fund managers (the major investors) can afford to go it alone
for fear of being isolated.
Instead, they will all tend to invest using the same kinds of methods, and in the same type of
companies.
Their thinking probably runs along the lines of: "If we have to take a loss over something, it's
better to take that loss as one of a group rather than take it alone".
It might be considered a boring way of investing, but it's probably sensible if you want to keep
your job as a highly paid fund manager.
This strategy is probably self-fulfilling.
If a lot of major funds buy into one 0f company it will drive the price up. So, many fund managers
pile into that company and something called a virtuous circle created.
But as an individual you can go your own way. You are not governed by it until unwritten rules big
investors have to follow.
Always try and form your own opinion - and don't worry if it is different from the experts view.
Sometime: they have to sing from a different son sheet to you. That's not to say you should always
go against what everyone else is doing.
But through following both your own judgment and that of market experts you should know when to
follow the herd and when to go against it.
Keep A Record Of All Bets
A boring tip perhaps, but crucial if you want to be successful. No matter what form of betting you
become involved in you should always keep record of your bets.
Free Bets
Not just the profit and loss figures either. No, keep an exact record of the type of bets as well.
With financial spread betting this is even more important.
Through keeping track of the different kinds of bet placed you will obtain a picture of what works
for you and what doesn’t.
You might discover that you are good at judging the FTSE-100 but bad on Wall Street, or good at
setting stop losses but bad at thinking short term.
You’ll only know through keeping detailed records.
If you plan to start spread betting on the financial markets of the world, these tips will help you.
Before you driven in for real, have a few practice bets.
If you’ve got the hang of it, and if you’ve got the money to spare, why not dip a toe in the water?
From time to time it might be a bit hot, ut it’ll always be fun. Good luck!
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