Spread Betting : Trading with the Trend | Get Financial Freedom Tips | Transform Your Financial Future


Monday, January 30, 2012

Spread Betting : Trading with the Trend

Spread betting is based on accurately monitoring the market. Whether betting on sports or commodities, it is important to understand how the market shifts and why. This means reading the news, watching rates increase and decrease, and immersing one’s self in an industry or world to best understand its trends. Trading with the trend can help people turn a tidy profit. The following are some ideas and strategies to consider when investing in spread betting. 

Spread Betting : Trading with the Trend

Place a Bet with Highs and Lows

A common strategy is to invest or enter the market when the market is moving forward or backwards. When there is a new high, this is called an uptrend. Conversely, a low would be a downtrend. Before placing a bet, it is important to enter a buy-stop, which protects a person from losing too much money. The bonus to this is that if the market does not get to the predicted high, one is safe because the buy-stop is not reached. The downside is that sometimes the market will go through the stop and then move backwards, which can lose a person money.

Buying on Dips

Another option is to wait for the market to reach a high or low and to then wait before investing. Commonly called buying on the dips, this is a more conservative or safe method of financial spread betting. The investment or bet can be made with an indicator. The only downside to this is that the market may not move to the determined entry price and could increase, leaving an investor behind. Still, another opportunity will appear. The benefit to this is that losses are more manageable and one’s stop-loss doesn’t have to be placed too far away.

Monitor the Market for Stabilisation

A trend will not last forever. This is why people need to monitor the markets and really move a stop-loss along with the new highs and lows. It is always best to invest in a trend when it is still early so that it can be ridden out. Thus, it is also important to jump off the trend and find a new one before one’s welcome is worn out. Charts are a helpful tool when it comes to monitoring a trend's performance. Such a visual can help people see when a trend is about to fall off and stabilise. After all, the market will eventually stabilize or right itself. It pays to be able to predict and understand when this will happen.

Spread betting is all about understanding how the market will move. Trends are important to identify early on so that people can make money quickly and early on. The earlier a person spots a trend, the quicker they can earn a healthy amount of money. Stop-loss will of course help people from losing too much money. The market is one that will shift. This is why spread betting is popular. Understanding trends and how to make the most of them means figuring out how to make smart investments.

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