Popularity of spread betting is on the increase and thousands enter this market every year to make it big like the ones that they have heard in stories. However, it is also true that more than 50% of the people that enter the market end up losing substantial part of their capital in their first year of operations itself.
Another big fact about spread betting is that only a small fraction of people make it big in this market and most of them lose out in the end primarily due to lack of knowledge and lack of use of proper spread betting techniques.
Since every individual has a different approach and temperament towards trading, there can be no fixed rule for making money through spread betting but application of certain techniques that have been used by successful brokers and traders are mentioned hereunder for the benefit of new comers.
Invest in Small Amounts
One of the winning techniques for spread betting is to use small portion of the money that can be invested into a single trade. This way you will not only limit your risk to a small amount of money but also come to know about the direction of the market.
Close Part Position
In spread betting trading positions change very fast from profit to loss and vice versa. Therefore, in order to save capital and make money from spread betting, it is very important to close part of your positions as soon as the trade enters the black position.
Trade in Market Direction
In spread betting even a small change in the price of the wagered product can reap heavy profits so the best technique is to trade in the direction of the market and to invest only in liquid items so that even if you have a loss at hand, the position can easily be closed by liquidating the position.