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Spread Betting has been one of the fastest-changing areas of trading in recent years. But even its incredible growth has done little to change the ratio of winning to losing traders. 􏰀e majority still lose most of the time. And they still don?t have to says investment writer Malcolm Pryor.

I wrote my first book about Spread Betting in 2007 (The Financial Spread Betting Handbook, Harriman House). The book is organised around the metaphor of mountaineers setting out to climb a mountain. Proceeding from base camp through to planting your flag on the summit ? moving from understanding trading platforms to devising, and executing, successful strategies ? the parallel seemed pretty apt.

When you start out in Spread Betting, risks surround you on all sides, though none may be especially visible at first: the ice hides much, and spread companies, at least back then, never set out to be Sherpas. A lot of that has now changed, and for the better. The number of firms offering Spread Betting services has increased significantly. It now stands at well over 50. The customer base has become more sophisticated too, and readier to jump ship to another firm if they see tighter spreads or a better service.

There has been significant downward pressure on the size of spreads. A decade ago, I had to pay a spread of 12 on the FTSE ? making day trading impractical. Now the spread is just 1 point. On two of the currencies I trade, I can get a spread of zero (and the Spread Betting firm still makes money!). Likewise, some unacceptable practices, such as the infamous re-quoting of prices, have been discontinued.

And many firms have invested heavily in education, in particular making significant improvements to the quality of their websites. But ? and it?s quite a big but ? most spread betters still lose.

The problem is that climbing that mountain has become, in some respects, less dangerous: but notless difficult. The weather might be a little better. The ground (on the whole) is more stable. And certainly tales of abominable snowmen (or painful quote shifts, inopportune margin calls, and other bugbears) are less frequent. But it?s still a task that requires acumen and endurance.

Thankfully applying these kinds of skills to Spread Betting is, for the most part, straightforward to learn. With the intoxicating speed and rewards that Spread Betting offers, maybe it is not surprising that it is simply a process all of us have to go through. It?s why I originally wrote The Financial Spread Betting Handbook, and it?s why I was excited to have the chance to refresh the whole book this year, bringing all of its advice up to date for those facing the same central task: winning regularly at Spread Betting.

To do this, I identify what winners do that losers don?t, and vice versa ? and then show how this can guide spread betters who are serious about trying to win. For instance, in the first edition of the book I remarked that most share traders remained long throughout the 2002 bear market ? and to their cost.

Since then we have seen the credit crunch, and another bear market, and once again that bias for going long (rather than adapting to the market conditions and looking to go short) has cost spread betters dearly. It shouldn?t have done. And my hope is that this revised book will help spread betters stamp out such mistakes in the next few years of trading, whatever further changes they may hold.

Please note that as mentioned above, Spread Betting carries a high level of risk to your capital with the possibility of quickly losing more than your initial investment. It isn?t suitable for all investors and you should ensure you fully understand the risks involved and seek independent advice if necessary.

Malcolm Pryor has authored three Spread Betting books and two DVDs. The Financial Spread Betting Handbook, 2nd edition, is released on 9 May 2011 and is available from the Selftrade bookshop at a 40% discount. He edits

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