Why you should trade in financial spread bets?

Module 2

Why you should trade in financial spread bets?

This is a question that I do get asked a great deal and other than the obvious, it’s tax free on all your profits and the good and the bad of financial spread betting and the bad isn’t really that bad, all of which you can learn about in myriad of articles that I have written and continue to write about pros and cons of financial spread betting.

Now I am assuming, giving that you are starting this course on trading, analysis and financial spread betting, that you have not traded before, or that you are using this 101 course, which is aimed at someone that who has never traded before, or who has little experience. Of course, if you do have some experience, then by all means, you can start on the 201 course, which moves more into trading and analysis and where I really hope and expect you to move to once you have finished 101.

Please understand, that by completing the 101 course, which can be seen as a foundation in spread betting, does not in any way, give you the ability to trade. The purpose of the 101 course in financial spread betting, is to get you up to speed on what financial spread betting is, what you can do with it and allowing you to understand the concepts behind trading spreads. By understanding these basics, when you move onto module 201, you can do so, knowing how those methods and analysis and professional methods of trading apply to financial spread betting.

The great thing about financial spreads, is that it’s a method of trading any aspect of the markets, which tend to usually only be serviced by needing a specific account for that derivate. For example, if you were to trade Forex in the actual Forex market, you need a Forex account with a Forex broker to do that. If you want to trade stock options and futures, you need a futures account, with a futures broker, if you want to trade gold and other metals, usually you need to trade directly with a broker that specializes in this and again, you will need a unique account just for that, the list goes on. Plus, any profits that you make with any of those accounts will be liable to tax, not so in financial spreads.

Yet, with financial spread betting, you only need one account, but can trade in the forex market, the futures market, the metals market and in fact any market that the broker has the ability to list. Given that most of the financial spread betting companies are owned by real brokers, they have access to market prices for all the markets anyway and therefore allow you to trade nearly every aspect of the market that you would want to trade anyway.

Which leads me to the next good reason why you should trade using financial spread bets. The methods of trading in any of the markets or derivates, using financial spread betting as your platform, the methods used apply and do not change. Let me explain that a different way. The methods of trading in the Forex market, techniques, pricing, analysis and quotes received and methods of managing the trade are the same, regardless. Therefore, if you are a successful forex trader, it would make sense to open a financial spread betting account as the methods apply there, to the same market, but the profits you make are tax free.

This applies to all the derivatives and markets traded in financial spreads. The techniques that one would assume are unique are in fact not and can be applied to the same market or derivative in a spreads account.

A further reason as to why you should look to trade financial spreads, is that it’s a great way to learn to trade. Most of the brokers for Forex, Options and futures etc, have a higher ceiling for entry, both in terms of financial deposit, understanding of the market (some brokers have questionnaires) or require a small interview over the phone, plus the information they require from you, before you can open an account can in some places seem somewhat of a joke. For example, for a forex account, I opened years ago, I had to provide authorized copies of my statements, passport and birth certificate. Crazy really. That broker still exists and has apparently got worse in terms of what they need before an account can be opened. You may now be asking, ‘why did I open a forex account, after all I have been saying here?’. Good question and one easily answered. I have to make sure that the methods and techniques that I apply and teach, work in the spreads market and I have to keep a close eye on the changes in the platforms on forex and options accounts etc, to see if they are applied also on spreads accounts. A means simply to double check. You of course won’t have to do this as I am doing it for you.

The other aspect I have found with many of the specific none spread bet brokers, is that because of their assumption that you are an experienced trader, there does seem to be a great deal of snobbery and dare I say it, in some cases an unwillingness to help. Where as, you will find the opposite with the spread betting companies. The reason being, is that they know and understand that many of their clients are new to trading and therefore tend to be, on the whole, more forgiving with helping you trade, understanding their platform and more. After all, if you continue to trade, they continue to profit.

Also, I have found that the general quality of information provided in terms of news and data and more is actually incredibly good, compared to those more specialized brokers. Again, this has to do with the assumption made by the specialized brokers that you would say 1 – have a professional charting platform and data feed 2 – that you have high level news feeds and 3 – understand immediately how the platform works. Believe me, some of the platforms that I have come across have been eye watering. Yet, with financial spread betting companies, they understand that mostly, you may not have charting software, data and news feeds and more so, they make their platforms easier on the eye and more intuitive.

As you can see and understand, there are so many good reasons to want to trade using financial spreads. You could of course in the future when you become more experienced, open a trading account with a more specialized broker, but I can bet my bottom dollar, that you will wonder what on earth the fuss is all about and will be as confused as I have been with some of them. Why have a trading platform that is difficult and cumbersome to use, when I need to place trades quickly and easily, without having to stress over how their platform works. Why make your life in trading harder than it needs to be.

By now, I hope that you understand why you should be trading financial spread bets. You can read many of the articles that I have written about financial spread betting on this blog, to understand further why you should, but ideally, you should have already got that from reading this module already.

Stage 1


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