Forex, Spread Betting Strategies. PDF Print E-mail
Written by Adam Woods   
Friday, 02 April 2010 20:32
There are many strategies that define how to trade forex but not many of those strategies include spread betting strategies which is the manipulation of your spread betting platforms to increase profit potential and limit losses. Different spread betting platforms have different features and methods of using their platforms so in this article I am going to outline a few strategies that I use with my particular spread betting platform.
by AdamWoods


There are many strategies that define how to trade forex but not many of those strategies include spread betting strategies which is the manipulation of your spread betting platforms to increase profit potential and limit losses. Different spread betting platforms have different features and methods of using their platforms so in this article I am going to outline a few strategies that I use with my particular spread betting platform.

Although as important as each other, it is important not to confuse spread betting strategy with trading strategy. Trading strategy is the implementation of technical and fundamental data to tell you when to enter and exit a trade. Spread betting strategy is how you are going to use your bet once in the trade to maximise the trades' financial effect. Spread betting strategy will include such decisions as to where you might put your stop loss.

You can always enter and exit a trade with your spread betting platform manually but it is recommended that you never enter a trade without a stop loss in place because of the volatility of the forex market. It is the moving of the stop loss once in the trade that is good spread betting strategy. We all know that like stocks and shares the forex market moves in waves and whichever trading strategy you use to enter the trade it is just as important to have a spread betting strategy to implement as part of your trading plan.

One of the most popular and limited risk methods of spread betting is to enter a trade and once 20 pips in profit move your stop loss up to your entry point as to eliminate risk. Sounds good in theory but as the market moves in waves the chances are you will be knocked out of your trade with zero profit the majority of the time. You can elaborate on this basic system by taking out 80% of your profit at 20 pips up and moving your stop loss up to your entry point that way you still have 80% of your profit on a reversal and if it keeps running you still have 20% on the trade.

A trailing stop loss is a stop loss that will follow the price up or down at the distance you set. This type of spread betting strategy is popular with longer term traders that often have stop losses in excess of 100 pips. I use a unique method of combining this strategy with the previous short term trade as to leave my 20% running into maximum long term trades with limited risk from my original trade.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Adam had been trading forex for years with little success. Adam, at first had no knowledge of the forex markets so hesigned up to Colin Atkin's selected members club. Colin is a professional trader who shares his trading live, all you have do is copy what he does and take the proceeds. Since Adamsigned up to Colin he has had the money to invest in other projects.