There are two common misunderstandings about spread betting, one being that it is just gambling, the other that is just for the short term.
It is easy to see how the gambling misunderstanding comes about. The word ?betting? conjures up images of the casino or the race track. The reality is that spread betting is a leveraged derivative product that can form an important part of a trader?s arsenal. Particularly for those that are fortunate enough to be successful enough with it to profit more than the capital gains threshold (under current tax laws capital gains tax is not applicable to spread betting). There are of course those that treat spread betting in much the same way as a trip to the casino or the race track with, for the most part, similar results ? but this book is not for them.
The view of spread betting being short term is prevalent even amongst experienced practitioners, and it is true that there is a large group of traders who use spread betting for intraday bets, or bets that last just one or two days. But there are others who use spread betting for medium term trades lasting weeks. ?Winning spread betting strategies? illustrates how winning strategies can be constructed to take such medium term trades.
What this book covers
From the author of bestselling 'The Financial Spread Betting Handbook'?, this book is about using spread betting in a structured way to take advantage of price moves lasting from around a couple of weeks up to several months. Because many people think spread betting is much shorter term than this, the book introduces the spread betting investor ? a concept used to describe the characteristics of someone using spread betting in this way.
After this concept has been explored in some depth the major part of the book is the detailed description of seven spread betting strategies specifically designed for this duration and matched to whether the market is rising, falling or trading sideways.
Who this book is for
Malcolm Pryor?s ?Winning spread betting strategies? is mainly for traders who already use spread betting products and who are looking to develop additional strategies with a very disciplined approach. It is assumed that the reader will already have some familiarity with a range of key trading concepts.
This book may also be of potential interest to those who have not yet got a spread betting account but have heard about spread betting and are keen to see some of the things that can be done with it.
This book will also be of potential interest to users of other leveraged derivative products, in particular CFDs. If you trade CFDs, rather than spread betting, just substitute CFD every time you see reference to spread betting. All the strategies in this book can be used with CFDs as the vehicle rather than spread bets.
How the book is structured
The book?s first Part starts by illustrating the very different results obtained by three stock market investors, depending on the actions they take during bear markets. This leads on to an introduction of the concept of the Spread Betting Investor, together with a brief outline of the profile objectives and resources of such an investor.
The following chapter discusses rules of investing and highlights the seven key rules which really separate the winners from losers. Part One concludes with an explanation of the mind-set of the Spread Betting Investor.
Part Two is the main body of the book. It illustrates the thinking behind and the steps required to build successful strategies for three main types of market: up markets, down markets and sideways markets. The strategies are not designed to be followed step-by-step without question, rather they are intended to demonstrate the art of the possible.
The examples contain both winning and losing trades, these are selected to illustrate the implementation stage following the strategy design, and to bring out a number of important points related to the psychology of trading. The examples are not intended to be representative of the results likely to be obtained if the strategies were followed verbatim. Each strategy is formed out of various building blocks which in real life need to be matched to the preferences, objectives and beliefs of the individual.
In summary, ?Winning spread betting strategies? is a carefully written and well constructed guide that will appeal to the majority of traders and investors who are looking to develop their spread betting strategies.
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