Spread betting strategies
Spread betting strategies vary from trader to trader but the most successful traders will be those that select strategies that suit their personality and apply them consistently. By finding approaches that suit their personality and temperament, traders will find it much easier to consistently apply these approaches and herein lays success.
Spread betting strategies can vary from short-term high frequency approaches to a more measured low frequency approach. Other approaches include trading with the trend or trading counter trend. The most effective and profitable spread betting strategies generally include a combination of trend following and low frequency trading. Trading approaches that trade counter to the trend have low chances of success in the long run and high frequency trading generates too much by way of trading commissions to be profitable for the retail client.
High frequency trading has become quite well known in the media of late but only institutions can profitably trade in this manner as they have much lower transaction costs due to direct market access and having their own clearing firms. The retail trader has no such luxuries and due to the high commissions generated with high frequency trading has virtually no chance of long-term success trading in this manner.
Spread betting trading
There are many different types of spread betting, and these include sports betting and binary betting as well as spread betting trading, more commonly know as spread trading. Spread trading gives the retail trader the opportunity to spread bet the world’s financial markets with much less starting capital and less risk than would be required to trade the actual markets, and without the need for ownership of the physical instrument.
By spread betting on these markets, the trader can place directional bets, either up or down, to profit from his opinions of whether any particular market will rise or fall. With spread betting trading, the profits are tax-free for U.K. residents.
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