Is it possible to make big money spread trading?

Yes of course. The key to making the really big money from spread trading is knowing which direction the market – example the FTSE 100 or Dow – is going to move and where to place your stops. For this you need a trading system with clear entry and exit points and placing of stops.

“If you sold Clearwire (NAS: CLWR) stock short at their absolute peak today and then covered at the very bottom, you’ve collected a 41% gain. I’d have to congratulate you not only on superhuman market-reading skills, but also on your robot-like timing: The peak prices lasted less than a minute, immediately followed by the day’s bottom — and that was gone within 10 minutes.”

I’ve heard some people saying that its very difficult to win really big amounts with spread betting since if you are consistently successful, the spread betting companies will stop you from winning? But is this really true? Are the providers like a casino where you can only lose money?

I think this is being paranoid as it’s just too easy to find an alternative provider if a broker stops you. Also, large size for spread betting means that you are trading in excess of >£500/pt implying you have at least £100,000 in your account in which case you are either

  1. A professional trader who has made profits in the past and will immediately realize if the spread betting provider is playing games with him before this becomes a problem.
  2. Wealthy and just using spread betting for punting, which is ok but may also means that you don’t have a good grasp of trading mechanics and are likely to lose money due to your own mistakes, not the provider’s.

My opinion has always been that if you can’t make money with spread betting, you won’t be able to make it just trading shares or other market instruments. This all comes down to prudent risk management and not taking excess risk in relation to your capital. Don’t believe everything you hear; most private traders who try this didn’t even have any money management rules in the first place. Even assuming that one provider limits you, you could always move to another provider.

There is no “easy” road.
There is nothing guaranteed.
Nothing is guaranteed in life.
True, there are some traders and investors that can make money, the question is, “can” you be one of them?