Spread Betting Strategies for New Traders from The Spread Bettor

LONDON, April 5, 2012 /PRNewswire/ --

Spread betting can be a daunting process for new traders - so we sat down with The Spread Bettor and asked the questions you want to know the answers to.

Covering everything from why choose spread betting - in particular over more conventional forms of trading - to how risk management tools can help limit potential losses and which spread betting provider to choose.

Interview with The Spread Bettor

Q. Some of our readers are yet to choose a spread betting provider; so, who do you trade with and why?

A. "Having taken time to shop around and see what other providers offered; I now trade with a City Index spread betting account.

City Index was the ideal option for me as it has a fantastic reputation (it's one of the leading providers of spread betting, CFDs and forex trading) and enables access to a range of professional and easy-to-use trading platforms.

As a new trader, it was an ideal choice as I could access their suite of educational tools and resources, including a demo trading account.

Through the demo trading account I could 'trade' on live price movements with a virtual cash balance of £2,500 for two weeks at zero risk.

I also attended free seminars with leading market analysts at their London office and used - and continue to use - their free webinars available through the City Index website.

Like many of the traders I have met through these seminars, I trade part-time. As a result, I find their City Trading™ mobile trading app suits my trading style perfectly; allowing me to trade-on-the move from wherever I am, whenever I want."

Q. Why did you choose spread betting over more conventional forms of trading?

A. "Spread betting offered me multiple benefits over more conventional forms of trading; such as leverage, the ability to profit from a market that both rises and falls and access to over 12,000 markets.

Also, as it presently stands in the UK, spread betting is free from Stamp Duty and Capital Gains Tax* (CGT) which ultimately maximises my potential profits and certainly puts a smile on my face as I don't need to pay a double digit percentage of my net gains in CGT."

Q. Spread betting comes with high levels of risk. How do you help limit your losses?

A. "There are numerous ways to help limit losses whilst spread betting, but here are the three that you must start with, even before you place a trade.

One, a trading strategy. A comprehensive trading strategy can help guide you whilst trading; it's easy to get 'caught up in the moment' when trading, resulting in trading on impulse (which is very risky).

Two, risk management tools. Such as a guaranteed stop loss. It's easy to let your trades run when they are netting a profit, however, a market's direction can change quickly so you must be realistic and employ orders that automatically exit your position at pre-determined points by you.

Three, technical and fundamental analysis. As the saying goes, 'knowledge is power' - and it couldn't be truer when it comes to trading. Through technical and fundamental analysis, you can analyse your chosen market's price movements to help guide you when placing your trade.

You can also prepare for future movements (which is the whole point of spread betting, after all) by analysing economic news and events that could affect your market's price movement, such as, company reporting dates."

Summary

Spread betting with City Index sounds like a great option for both new and experienced traders.

As an alternative to more conventional trading, it also seems that spread betting could be the operative choice, in particular for those based in the UK.

However, it is important you remember that as a leveraged product, spread betting can result in losses greater than your initial deposit. Ensure you fully understand the risks.

* Spread betting is exempt from UK stamp duty and Capital Gains Tax. However, tax laws are subject to change and depend on individual circumstances. Please seek independent advice if necessary.

About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, spread betting.

We constantly look to improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer service and support. Visit http://www.cityindex.co.uk/ for more information.