Spread Betting Tips: Don't be fooled by Temporary Price Swings

LONDON, May 11, 2012 /PRNewswire/ --

The current eurozone crisis is causing significant price swings in the markets, making predicting future price movements increasingly difficult for new traders.

The FTSE 100, for instance, dropped to its lowest level in over a year to 5500 on the back of the Greek crisis on Wednesday 9 May, but climbed back to 5530 by the end of the trading day. The Dow Jones Index, meanwhile, slid by 97 points to close Wednesday at 12,835.06.

Volatility can often make market speculation a complicated process, leaving investors struggling to determine when price changes are temporary and should be ignored, and when they are here to stay and therefore, exit their trades to cut their losses.

Financial spread betting provider Finspreads offers key tips to help ensure that you don't get caught out by the markets when you're least expecting it.

Plan a trading strategy

Experts recommend that it is imperative for traders to determine whether they believe a market is likely to head - up or down - and why before placing a trade.

Financial news forecasts, company earnings reports, trading forecasts etc are a great way to cull information on the market you wish to invest in before placing your trade.

Analysing charts to identify market levels is also always a good idea.

Financial spread betting providers such as Finspreads allow you to speculate on market prices irrespective of whether they are rising or falling.

You simply need to determine whether you believe prices will rise or fall in the coming days. You go long or 'buy' if you feel prices will rise and go short 'sell' if you feel that prices will fall.

If you were right and the markets move in the direction you had anticipated, you make a profit. If no, you net a loss. Find out more about how to spread bet with Finspreads.

Set profit and loss targets

Setting profit and loss targets - identifying how much you wish to profit from the trade and the maximum amount you are willing to lose is another a great way to ensure that you don't get any nasty surprises.

This way, an instrument (say stocks or indices) approaches your maximum loss level, you know that it is time to close the trade and move to the next one, rather than let it run indefinitely in the red in the hope that the tides will turn and you will profit eventually.

Track your trades even when you're on the move

Having the ability to react quickly to market movements is essential in short-term spread betting. Finspreads offers an iPhone™ spread betting application, giving spread bettors the ability to trade whenever they want and wherever they are.

This ensures that as a trader, you can react to market movements even as they happen, 24 hours a day, so you never lose out on a trading opportunity.

Find out more about the benefits of spread betting with Finspreads.  

Spread betting is a leveraged product which can result in losses greater than your initial deposit. Ensure you fully understand the risks before you start trading.

About Finspreads:

Finspreads is a leading online financial spread betting  firm, offering access to thousands of instruments on the world's financial markets.

The company pioneered fully interactive online spread betting in 1999 and continues to invest in technology to ensure that its service remains amongst the market leaders.