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How to Learn Spread Betting and Prosper
How to trade the markets
There is no point getting involved in spread betting unless you first have some ideas of where to buy and sell. This guide therefore assumes you've been researching some trading strategies over the last few weeks and months.

Don't worry if you're struggling to come up with a proper trading plan because the next 8 weeks are all about experimentation, both with the markets and different trading ideas.

But what about the risk, isn't it unwise to start trading with real money when some of your ideas will probably result in losses?

It's a good point but the trick to making the next 2 months work successfully is to trade with tiny stakes so even if you get a trade horrendously wrong your maximum loss will be no more than £5. I go into far more detail on this important topic in subsequent pages.

Where to get trading help

If you do need some pointers of where to get help and trading ideas then consider the following -

  • Books: Plenty of great trading books on Amazon in the £10 - £30 range. Make sure you read the user reviews but watch out for the fake ones - these can normally be easily spotted as they're either too good or read like a marketing message

  • Internet: There's a lot of information to buy off the net but most of this same information is available for free as well. I'd advise you don't spend any money on a website course or software until you get more experienced and start to turn a profit

  • WARNING: Heavily promoted trading courses: I'd advise everyone to stay well clear of the heavily promoted trading courses. They normally follow the same pattern: a free 2-3 hour introduction (which is actually a sales talk) and then a very expensive £2,000+ weekend seminar. In my opinion these companies are more about marketing than trading and if you take the time to research them it doesn't make good reading. Summary - don't fall for their aggressive and clever marketing as it's odds on you'll regret it

  • Charting websites: If you want to learn more about charts and technical analysis the excellent website www.StockCharts.com has a good Chart School which is 100% free. Most traders use charts in some form or another and I'd advise you study them. One advantage that charts offer the new trader is they can be used to trigger specific buy/sell signals

  • YouTube: It's an excellent resource with a lot of free training videos so spend a few hours over the coming weeks watching some of them - www.youtube.com
If you're serious about trading then consider getting properly taught
Getting taught by an experienced trader is in my opinion the right way to go. You can do it yourself for sure but most will have to visit many dead ends before they find a useful and profitable method/strategy. See this page for more details on this important topic.
Important - Always use a stop loss
"More money has been lost via people not using a stop loss than all the other reasons put together"

I don't know exactly who that quote is attributed to but it perfectly sums up the risks of not using a stop loss when trading leveraged products such as spread bets.

Yes, stops will often frustrate you, they frustrate all traders and yes, you'll sometimes place them in the wrong place. But if you don't use them, or some other form of financial damage limitation, it's almost certain at sometime in the future the leverage will get out of control and quickly destroy a significant proportion of your account.

The other advantage of using a stop loss is more subtle - it means you understand that successful trading is first about risk control then making profits.

New traders, myself included when I first started out, often think otherwise convincing ourselves we know best. But they either get busted out quickly or come around to the correct way of thinking......

Stop losses also have a hidden use, and a very useful one at that - they can define exactly how much to trade (per point) on any given trading signal. I go into detail on this topic on later pages.

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