Many people are of the misconception that spread betting is only for day trading and very short positions. Whereas the reality is, if you really wish to make money on the markets you need to maximise your trading potential and look outside the box into medium and even long term investments. Here is a brief explanation to the types of trading available with spread betting companies.

Day Trading

This is really for multiple positions during any given day, normally its best to trade when the markets are open as this is where you will obtain the tightest spreads. Most trades last no more than an hour and you are looking to make money from small market moves and using technical levels and the news.

Short term

Short term trading normally never goes past the week and most traders will hold 3-10 positions during this time. A trade will normally last in the region of 24 hours to 5 days. With short term you should be on the lookout to make money on the 1% to 6% market moves. You should also use technical levels and market news to base your trades upon.

Medium term

With this style of trading you should really have a maximum of 5 position within any given month. Most of what you are trading should last between 2 to 4 weeks. Here you are looking to make money on larger market moves based in the region of 5% to 10%. With this style of betting you should be focusing on fundamental analysis.

Long term

Only a few bets are required on this style of trading to help you minimise your risk. Most will take a few positions during a quarter and the trades should last a maximum of 2 quarters. Here you are looking for market moves greater than 10%. You are also using both technical levels and fundamental analysis to make you bets.

Overall some people are not suited to all styles of bets, but the different styles of bets are important to keep in mind if you wish to maximise profit. Remember comparing spreads can help you save money from the outset ensuring you get the best price on any given market.

You should always understand spread betting before you start as it is a leveraged product and you can lose more than your initial deposit.

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