Crowds of people come to the financial markets, besotted with advertising, having no idea about the principles of healthy trading in market chaos. And only after their deposit is drained, do a few of them begin to understand that, among many things, a choice of a spread betting platform plays a crucial role here. Why? Read on to find everything out!
What is a spread betting platform?
Simply put, spread betting platforms are web or software applications through which the market speculator can set a price for each point of movement of the instrument they trade.
The perks given by a reputable spread betting platform are exactly the difference that makes the trading activity different from one user to another — they constantly use up-to-date functionalities to ensure that the trading process is reliable, stable, and gives full control of one’s actions. In other words, it is about a set of features that could minimise the risk of drawdown and loss of a bigger chunk of the trader’s deposit.
How difficult is it to use a spread betting platform?
The learning path starts with a couple of tasks
The broker tasks include:
- providing a trader with modern functionality;
- making trading as comfortable as possible while watching the movements of a chaotic market;
- protecting capital from massive drain;
- providing the technical means for following a trading plan.
The reason for the bad reputation of trading is that people are rushing into it without the slightest idea about elementary things, patterns, terms, and the essence of what is happening in the financial markets. Crowds of beginners do not think about it at all — they do not attach importance to paramount things. And this is their system error.
The chaos of the market can only be overcome with proper order and organisation. And that’s not forever. This can be compared to a ship in a stormy ocean, which acts according to the rules because the storm sometimes goes astray, but at the slightest opportunity, it immediately recovers, adjusts the sails, and moves on.
Traders act in approximately the same way. They adjust the strategy, hold on tightly to the helm (prescribed algorithm), and after a strong storm (a series of unprofitable transactions), reach the nearest port (trading club) to take care of the ship: patch up, repair, and bring it into proper shape.
The analogy is too obvious to give hints, but you guessed it — it’s about choosing a decent trading platform, with a proper risk management system, trade analysis, and strategy tweaking.
What makes a trading platform a great one?
Today, it isn’t that difficult to find a regulated broker. After all, the trading market is developed enough, and picking a platform is just a question of your preferences.
Find yourself a beginner? Afraid of choosing the wrong website? Then, let’s look at the core features of a good platform.
Try to find a regulated broker that is one of the largest market makers in the market and has been repeatedly awarded prizes at prestigious competitions.
It should have its offices in different countries, representing all continents.
Ideally, the broker would offer a wide range of trading instruments for different financial markets:
- currency pairs;
- indices; (Australia 200 – Cash derivative price chart)
- treasury bonds.
The wider range of financial instruments you’ll have, the higher the chance to craft a better trading portfolio for your day trading activities.
What can be more important for a rookie trader? Therefore, top-notch brokers pay serious attention to training issues.
There are several forms of education:
- trading content guides
- video guides
As a rule, the content is provided by leading traders in the company, as well as world-famous financial market experts are regularly involved.
Check if your broker’s website publishes thematic sections and webinars. Thanks to this, you can choose the topic of interest and sign up. Most trading webinars are free, not only for the company’s clients.
An excellent platform provides info in the following areas:
- comments of financial market experts;
- comments and forecasts on currency pairs;
- technical analysis;
- fundamental analysis.
It’s good if your platform publishes the economic calendar for the week and month, charts and exchange rates, and trading schedules on Forex and stock exchanges.
How to minimise your risks and pursue your financial goals?
What is important to observe here:
- Calculate the size of the stop-loss and take-profit that is acceptable for you as a percentage, not as a sum — you do not know in advance how your financial instruments will move and what the specific market situation will be.
- Make sure that the risk of capital drawdown remains within 5%.
- Use a dynamic stop-loss — when the price goes up, the stop can be moved by the appropriate number of points. If the asset moves down, it will stumble upon an updated level, and the losses will be much smaller.
- Use your leverage wisely — usually, 1:100 is sufficient. If brokers offer more — refuse, you already have the amount of credit money 100 times more than the deposit, so do not take risks.
- Do not chase everything at once — do not open too many deals if you are not able to find time to follow them. This is a risk of losing all your money.Choose your trading instruments wisely — is advisable to know what you are betting on
- Some traders prefer to withdraw some amounts from the platform regularly to keep a healthy balance of the capital they are willing to risk. Don’t be tempted into bigger deals until you’re mentally and financially prepared for them.
- If you are comfortable trading during the day, then do not trade at night. And vice versa. Consider your routine.
Choose your platform wisely
It is easy to find a platform that fits you the most — just write down your requirements, read some reviews, and sign in for a demo account to test drive your shortlisted brokers.
The simpler the platform you picked, the smoother your trading learning path. After all, it is not the broker that makes you keep control of your trades, but the ability to use its help to the fullest.
*Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when spread betting and/or trading CFDs. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
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