Short-Term Trading or Longer Term Trading?

Another spread betting tip is to purposely decide on the length of bets that you want to trade. Long-term investors often point out how it is time rather than timing that is important. The problem with taking a longer bets is that it potentially ties up your money for a longer time, which can prevent you getting all the opportunities that you see. On the other hand, if you concentrate only on bets that last for a few days you will be betting much more frequently, which is not in itself is a bad thing, but which can lead to a beginner over trading. In addition, short term trading requires strict discipline and there aren’t a lot of traders who can pick trading points with some degree of accuracy so riding trends may be a better strategy for most.

Some prefer to get in and out of the market as quickly as possible and avoid trading during trading updates to minimise the risk of getting caught out by knee jerk price action. If you are planning to trade the longer term trends, then you have a better chance of making big gains than intraday movements, but you need to allow the position sufficient room to ride the normal market noise. This in practice means scaling back the position size to keep the possible loss to a manageable amount and widening the stop to avoid getting stopped out by the normal market volatility. If you take out a long-term bet you can always capture your profits or losses by taking out a second bet in the opposite direction, and this is standard way to exit the trade when it has achieved your target profit, or when it has reached the level of maximum loss that you want to sustain.

It is up to you to decide what best to use for your strategy, and you have to take into account not only your resources but also your temperament and your skill and experience at spread betting. The introduction of rolling contracts means that you can now hold spreadbets for as long or as short a period as you like. Like stock equities, the price of rolling contracts moves as the price of the actual stock.