If you want some financial spread betting tips that will help you make tax free profit then pay attention.
My name is Lee. I’m a big time introvert. Writing this blog and posting pics of myself and making youtube videos is against every natural instinct I have.
I’m doing all of this stuff against my better judgement because I can see the devastation our current socio-economic system is having on families (fathers in particular) and I want to do the little bit that I can to help you break out of it.
I’m also known by the pseudonym the ‘Pit Village Trader’ and I’ve been spread betting the financial markets since 2011. These financial spread betting tips are the sum of all my experience.
I left my full time job in 2013 to become a full-time speculator and in 2018, I made £25,101 tax free profit from spread betting in the UK.
Despite what ‘professionals’ might say, spread betting is gambling. It is a highly volatile, high risk game of chance that can lead to life-changing losses if you are not very careful with your bets.
I’ve been spread betting for almost a decade now and despite losing money in the first two years, I have somehow managed to be profitable ever since. So please pay attention.
In the 10 years or so that I’ve had this blog online, I’ve helped hundreds of traders speculators just like you make enough of a side income from speculating on financial markets to substantially improve your quality of life.
And today I am going to give you the same kind of information download that Neo in the Matrix received when he learned to do Kung Fu in less than a minute – except it’ll all be about helping you to spread bet the financial markets profitably.
I’ll combine the best of what I know with the top tips from much smarter people than I to give you a short, sharp shot of spread betting sugar to help you make extra money for your family.
Does having extra tax-free money for your family sound good to you? Then let’s get started!
My Best Financial Spread Betting Tips (After a Decade in The Game)
I’m condensing almost a decade of spread betting experience into 4 simple tips that I think will help you become a more profitable trader.
I’ve no doubt other people have their own way of doing things and I’ll include the best tips I can find from other spread bettors below.
Before I get to their top spread betting nuggets, I want to share with you the tips that have worked for me. I hope they will help you improve your quality of life the way they helped me improve mine.
The tips are in order of importance; with Tip One being the most important to me.
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Tip One: Only Spread Bet With Money You Can Afford To Lose
It sounds obvious I know, but this is so fundamentally important to your success. And when I say, ‘afford to lose’, I really mean it.
When you deposit money into your spread betting account, you really have to accept that it is gone forever. You cannot rely on it for income, gain or even to protect capital. If you want to do those things, you should consider investing in stocks and shares instead.
If, on the other hand, you want to speculate (spread bet) on financial markets with the hope of realising quick profits but with the highly probable outcome of losing all your money, keep reading.
Spread Betting with Money You Can Afford to Lose Is Your First Advantage
When you speculate with money you do not need, you are able to approach your trades without the psychological and emotional drama that causes you to panic. Panic costs you money by enticing you to exit positions too early or jump into trades for fear of losing out.
Being able to avoid these two demons is more than half the battle of spread betting successfully.
So don’t trade what you can’t afford to lose.
Tip Two: Avoid Noise to Spread Bet Successfully
You don’t need any noise distracting you from what really matters – both in life and in trading. Noise to me is pretty much anything that distracts me from the only thing that I believe really matters; Price Action.
What I’ve come to believe after so long in the game is that I can’t beat the insiders who already know what’s going to happen and have already taken positions accordingly.
Yes, I know this is not supposed to happen but I’m a realist and I’m fairly certain it happens every day in the financial markets otherwise how is it that prices move before news items get published?
“I tried getting up early every day to read news and set alerts but it never did me any favours. No matter how quickly I read a piece, it seemed like whatever I was reading about was already factored into the price.”
I’m not smart psychic enough to compile little bits of info into a longer-term timeframe picture with enough accuracy to get my timing right. So for me; news, tipsters, analysts or any other kind of ‘noise’ is of no use.
Avoid noise.
Tip Three: Buy On Strength, Sell On Weakness
I have yet to find a greater indication of investor sentiment than price action.
I have also not yet discovered anything that seems to move price as much as investor sentiment. Not fundamentals, not macro-economic pictures, not even news is a reliable indicator of which way a price is going to go.
If it were, all the analysts would be rich – and probably wouldn’t be analysts anymore.
Price action, on the other hand, always seems to give a clear, evidence-based indication of how investors are feeling about a company at any given time.
The problem however is that you (I) cannot predict price action so that leaves me with only one viable option if I want to spread bet profitably – follow it.
What that means in practice is that when prices are moving upwards, I look for opportunities to buy (go long). When prices are moving down, I look for opportunities to sell (go short).
The Taoist concept of Wu Wei – the action of non-action – or ‘going with the flow’, is a huge influence in why I choose to trade this way, and it is the only ‘system’ that has yielded consistent tax free profit for me.
Buy on strength, sell on weakness.
Tip Four: Do Nothing (or as little as possible) to Spread Bet Profitably
To quote one of my favourite trading characters, Jessie Livermore, who amassed (and lost) hundreds of millions of dollars several times throughout his career;
“After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.“
I’ve come to learn through experience that this is absolutely true for me as well. On the spread bets where I have made the most money, I have held longer than I thought I ought to.
This is true for me in both holding positions and setting stop losses. To give some context or practical steps to this approach:
- When opening positions, I set wide stops to try and ride out volatility. It doesn’t always work but I usually set them at around 10% (meaning that if a share price is 500, I’ll set my stop at 450 or 550 and my position size will change to fit the stop based on how much I’m risking in each trade).
- When in profitable positions, if I’m not adding to them, I try to hold them as long as I can because I’ve often found that the market has a tendency to go further than you think it will in any given direction.
The one caveat with this though is that if at any time an open spread bet has you logging into your account and checking your trades every minute to the point where you are unable to settle, just close the position and take your profits.
Sometimes it is best to have an easy mind than a passionate obsession with your trading. Getting that involved and addicted to your trading only leads to one place: trading depression.
This approach will also help you to not over-trade. Too much trading has never ever worked out for me and now if I make 4 trades a month, I’m having a busy month.
So, do nothing (or as little as possible).
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The Best of My Spread Betting Experience
Those 4 tips are the best of my 10 years or so of spread betting experience condensed into as short a form as possible. If you pay attention to them, I have no doubt they will help you become a more profitable trader.
However, I know how difficult it can be for you to see the charts through my eyes so I’ve also taken all of the best tips that I could find from other successful spread bettors and included them below in a quick fire list to help you really improve your trading in as short a time as possible.
All of these tips were taken from the free amazon kindle book “The Harriman Book of Spread Betting Rules: 140 expert tips from top traders” so there is some element of vested interest for the publisher here (sharing tips from their own authors) but it is still definitely worth downloading.
The Best Financial Spread Betting Tips From Other Jedi Spread Bettors
Robbie Burns aka The Naked Trader
Use stop orders Use stop orders.
“Did you get that? USE STOP ORDERS!
A bad stop order is better than no stop order at all – you must put one in place when you open any single spread bet. Stops impose discipline and limit losses.
However be very careful where you place them. Too close to the price and you will get stopped out too easily. Have a look at the chart and set below the previous support.”
Don’t try to spot a turn or go against a trend
“You may spot a company with a rising share price and think to yourself “Ah ha! That price is due for a fall, I’ll place a short spread bet.” Don’t! You’ll most likely lose because trends can stay in place longer than you’d think.
As some old economics geezer said: trends can be irrational longer than you will be solvent. It is good practice to let the trend inform you – go with trends, don’t try to be clever and second guess them.”
Avoid spread betting forex
“Forex is a dangerous market for those who aren’t expert in it and devoting all their attention exclusively to it. For this reason I reckon it’s best to avoid spread betting forex altogether – most people who try lose, and even breaking even could be considered a success.
Stick to something easier and less risky, such as shares.”
Don’t spread bet indices
“I would recommend you avoid spread betting indices themselves – prices can move fast and it can become addictive, such that it is detrimental to your other trades and indeed your life away from trading.”
Read more of Robbie’s wisdom, his trading diary and other such things over at The Naked Trader website.
Clem Chambers, CEO of ADVFN
Swing trade shares that go nowhere fast
“Swing trading is a favourite trading theme. What you are looking for is a company that flails around in a long-term channel – say between 80p and 100p – every few months.
The idea is you go long at the bottom of the channel and short at the top of the channel as the share price rattles around going nowhere fast.
If you want to experience the thrill of riding this particular tiger, then the key is to build up a universe of stocks behaving in this way and then pick only the best ones to play with.
The key to spread betting is only backing the blindingly obvious while leaving the rest. “
Buy a Bear, buy a crash
“A crash is an amazing event in any market. It is pure adrenaline and high drama. Fortunes are made and lost, but generally lost.
When markets crash there is a superb opportunity to spread bet good stocks at cheap prices. In a crash everything falls and there is little discretion.
At the end of the process positions can be added that give enormous returns after the crash is over.
Buying a crash is like selling a bubble and, once again, it is best to leave it until after the crash has happened to get in rather than try and get the bottom as the collapse is underway.
The bigger the crash the more post-event time you have to get in. Proper crashes very rarely recover quickly and it is said one year is quick.
Normally what causes the bust is not what you want to buy. It’s the companies dragged down for no reason you want to spread bet.
When the market crashes, companies that have been around forever will be crushed alongside all those bubble stocks that imploded. It is in a crash that the winners and the losers are separated.”
Spread bet on breakouts
“Shares trading in a trend tend to stick in that channel. Every time the price looks like it’s about to jump into new territory it is highly likely to drop back off.
This is the basis for swing trading. However due to market symmetry there is no certainty this will happen. One time out of five it will break out and then possibly go way higher.”
You can learn more about Clem and his vast body of work by visiting his website.
Tom Hougaard, Professional Trader, Author and Trading Coach
Make sure you know that no one knows
“Do you think I know what will happen today? Do you think anyone knows? I don’t. No one does, so don’t bother listening to anyone.
I could fund the building of a stairway to the moon with the money I have lost listening to people who thought they knew something. Now I only talk to one person: Mr Market.
The market is best placed to reveal what it is going to do.”
Trade what you see, not what you think
“We go to school to learn, to think for ourselves, to keep our own council. In the trading arena, however, your wallet is tiny compared to the market.
The best thing you can do for yourself is to think very little. I would give you this mantra to remember: Trade what you see, not what you think.
Your mother will not approve but if you were to get a tattoo to help with your trading, you should place it where you can always see it when you trade and it must say: Trade what you see, not what you think.”
Momentum makes logic invalid
“If I went to the supermarket and bought a pint of milk on Tuesday and it cost me 5% more than it had cost me on the Monday, I would question the shopkeeper and stop drinking milk.
If the market went up 5% on Monday, I would most likely be happy to buy it on Tuesday. There is no price too high to buy.
Momentum rules, especially for the intra-day trader.”
Tom trades daily over at TraderTom where you will find articles on trading, on trading psychology, a free beginner’s course on technical analysis as well as information on his books and courses.
You will also be able to view Tom trade live or watch his live trading videos.
How You Can Put These Financial Spread Betting Tips Into Action Today
I know what you’re thinking; “it’s OK for you Lee, you’ve been doing this for a while and you make it sound so easy but what about me? How can I get started?”
Well, there’s no shortage of spread betting brokers that will give you a demo spread betting account to learn to trade in. I did exactly this for about 6 months prior to starting to trade with real money.
Let me tell you though the experience of trading with real money vs demo money is altogether psychologically different. Therefore my advice is to just get started one way or the other.
You should definitely read all of my spread betting posts (especially my early trading diary) because I’ve been through all the highs and lows of profits and losses. My journey will fortify your own.
You should also definitely subscribe to my mailing list at the box over to the right (or beneath this post if you’re reading on mobile) where I send out a weekly update of insights and opportunities and a bit of Pit Village Wisdom. It’s completely free and you can unsubscribe at any time.
You could also pop over to my YouTube channel (I know, it’s pretty rough!) and follow the playlist about spread betting. I might even have some live stream trading happening!
How To Get Started If You Haven’t Spreadbet Financial Markets Before
If you’re completely new to spread betting I’d recommend you open a demo account with one of the brokers from my spread betting demo accounts list.
I’ve used them all personally and have listed them in order of preference.
How To Get Started If You’ve Already Spread Bet Financial Markets Before
If you’ve already been spread betting the markets (either with a demo account or real money) and you feel comfortable with how it works, I’d recommend you open a real money spread betting account with one of the brokers from this list of real money spread betting brokers.
I’ve used all of these real money brokers myself and listed them in order of my preference.
Why Learn To Spread Bet With Real Money?
The reality is there is no learning experience greater than actually doing something for yourself.
I learnt more in my first 6 months of trading with real money than I’d learnt in the prior 2 years of reading trading books and trading in demo accounts.
But remember tip number one; only ever trade with money you can afford to lose. Of course you don’t want to lose your money, but you need to be emotionally detached from it if you want to spread bet profitably.
My Best And Final Spread Betting Tip Of The Day
Don’t waste your real life by spending too much time in front of your trading screen. Yes, it’s fun, it’s a rush, it’s sometimes depressing but none of that matters if you make a fortune spread betting the financial markets only to get to the end of your life regretting all the time you could have had with your family instead.
Be happy. Trade well.