4 Spread Betting Techniques That Work

Committing to a trading plan is essential if you want to increase the potential to generate profits. Following this spread betting tutorial will help make it easier and more efficient to create a plan you can use with your portfolio. 

Utilizing one or more of these four techniques helps diversify your approach and protects your capital:

Breakout Spread Betting

Buying a breakout and placing a stop below the last daily candle signifying a high point is an excellent spread betting technique you can use to capture strong movements in price. This strategy is best used on stocks or investment vehicles that have been trending near the same price for an extended period. 

If the underlying asset has good fundamentals, using this strategy can be even better. Entering this type of trade requires a breakout in price over the previous high. Waiting for the price to hold for two consecutive days may be used to ensure bullish action.

Reversal Spread Betting

Using the reversal spread betting strategy is done in either a bullish or bearish market. If the investment vehicle you’re trading is moving higher, you’ll want to short it and hope it reverses lower. Using the reversal spread betting technique in a bearish market allows you to purchase an investment vehicle that you believe will reverse higher. The best way to incorporate this strategy into your trading activities is to use candlestick patterns known to reverse such as double tops and bottoms or a head and shoulders formation.

Trend Market Spread Betting

Another popular technique used in this spread betting tutorial is to trade with the trend. As cautioned by Capital.com, “Please, never forget to evaluate your risk appetite before entering the market.” Utilizing price action based on the 20, 50, and 200-day moving averages is one way to incorporate this strategy into your trading plan. Once the value of the investment vehicle you’re trading moves over the moving average you are following, it should keep trending higher. Selling a portion after it moves higher for seven days or a specific percentage is the first part of the trade.

The second part of the technique is waiting for a pullback to the moving average and adding funds back into the trade. Continuing this type of trading while the trend is going higher should help you accumulate profits. Trend market spread betting can also be used in bear markets by going short each time the price action pulls back up to a moving average.

Scalping Spread Betting

Another popular strategy to utilize is scalping spread betting. It’s completed by taking small profits once they are available. Using this strategy requires constant engagement during the trading day. You’ll be taking small profits when an investment vehicle has a small gain. Using this strategy if you’re risk-averse is an excellent way to ensure you are booking profits.

Utilizing your chosen criteria for each of these strategies is usually best. Trying each one will help you understand more about the way they work. It’s also essential not to look for the best method as each has its strengths and weaknesses. Incorporating any of them into your short and long-term trading will likely be highly beneficial.