Financial spread trading markets are volatile and so not suited to everybody. If you do, however, take the plunge, there is a set method you should follow.
The choice of a betting platform is actually not critical from the outset. None of the major providers has annual fees, so it would be possible to set up any number of accounts and try them before making a final decision.
If you wish to bet, you must decide on the means you will use. It is increasingly possible to bet with a mobile ‘phone that uses the iOS, Android or blackberry Operating systems – a smartphone. Most spread betting, however, is conducted online. There are more than 20 brokers in the United Kingdom.
Before you choose a betting platform, you should compile a list of the features you require. You then draw up a shortlist of websites which seem to meet your requirements. You should look into the past performance and software of any company to which you will be giving more than £100.
A betting platform should allow stop-loss orders and other limits. Using a demo account will allow you to get a feel for a company. A reliable and secure trading platform will be praised in reviews, blogs and discussion forums.
Your loyalty could be swayed by the educational resources available to new traders. FAQ sections, tutorials, seminars and video provide considerable value to users.
You should find out which markets are available and the returns and costs associated with them. Not every broker will cover smaller or obscure foreign markets. Primary concerns are the size of the spreads and margins. A tight spread will be more conducive to making money in the long run, and the spreads offered by major companies range from £3 to £6. Some companies offer extremely tight spreads, but will widen them drastically as soon as any kind of market volatility is in evidence. Market volatility is great when the USA Non-Farm Payrolls report is released, or when a company makes some announcement.
But a low spread will mean little if you experience poor execution, a high number of re-quotes, or slippage. Even today, some trading platforms are cumbersome and difficult to navigate. The leading companies strive endlessly to stay ahead of the competition by continually improving their platform and introducing new features. Some providers have dared to offer zero-point spreads on certain markets, but it is widely believed that the next point of contention will be technological.
You should be wary of spread betting offers. You may have to make one or more large bets to qualify, which is likely to cause you to lost more money than you would get from the offer.
Within the last year, a veritable price war has erupted among the spread betting providers of the United Kingdom, which has been much to the benefit of spread-betters, and so there has never been a better time to indulge in this practice.