Here are a few basic tips:

Start small, start very very small! It may not be exciting making a few pounds profit on a good trade, but its far better to lose ony a few pounds on a bad trade! Only go to larger trades when you can consistently make a profit. Build up your skills, strategies and confidence before going up a gear.

Watch the Spread! Spread trading providers don’t charge commissions but there are still dealing costs involved. In particular they will always offer you a wider bid-offer spread than what is available in the cash market. For instance, on Gold futures the bid offer may normally be $0.10 or $789 bid and £789.10 offered. However, the spread betting provider will normally quote you a $0.50 οr $788.80 – £789.30 spread. At first glance this may not appear like a lot but these costs can have a dramatic effect on your profitability over a period of time especially more so if you tend to make a lot of trades.

Have a trading plan – write it down, adjust it if it doesn’t work, or can be improved, but stick to your rules. Dont bet on tips or whims, dont gamble.

Use Charts but Don’t Complicate your Analysis! – Whether you believe or not in technical analysis is not important as the fact that 80% of market participants follow them which means that you cannot ignore them. Things to watch out for include major key resistance and support levels such as the 50 or 200 day moving averages as well as price breakouts. However, don’t over complicate matters – the average person now has access to sophisticated charting with numerous different technical indicators and the use of these technical indicators has massively diluted over the year. Instead, it would make better sense to focus on the shape of a chart on different time horizons. In particular does the chart look bullish or bearish? Are there any key levels of support or resistance approaching? If so, study how the market reacts when it reaches these key levels as this can give hints as to the future direction.

Don’t Be Worried about using Spreadbets for Holding Longer Term Positions – We often hear that spread trading isn’t cost effective for holding out longer term positions but the reality is that with today’s very low interest rates, the costs of holding a position have been sharply reduced and it may cost you less than 5% over the course of a year (in financing costs) to hold a spreadbet for a full year. In fact, taking a longer trading timeframe is often a good idea as it gives you more time for your trade to be right and you don’t end up having to following the markets constantly.

Use Demo Accounts When First Starting Out – Most of the spread trading providers nowadays offer simulator accounts that are useful to familiarise yourself with the different spread betting markets and the workings of the trading platform. Demo accounts are also great for general practice and also to test a spread betting system. Do note, however, that trading with ‘dummy funds’ is a different thing to utilising ‘real funds’ – the psychology just isn’t there (the emotions like greed and fear are missing from the trading element) and trading with demo funds won’t expose your trading weaknesses. After a month or so, try depositing a few thousands into your spread betting account and trade small positions. Once you start to acquire more confidence in your own abilities to trade successfully, start to gradually (but slowly) increasing stakes until you to your intended trade size.

Don’t Trade Unfamiliar Markets – Don’t trade markets you aren’t familiar with or companies which businesses you don’t understand. For instance, commodities are a classic where weather and shortages can play a major hand and sharply affect their prices. So if you want to deal in these markets make sure you are fully informed and study historical charts to get an idea of the price fluctuations before delving in.

Always, Always, Always use a stop loss. Trading without a stop loss is financial suicide. If you dont use a stop, then just imagine if you were trading Marconi, Enron, or Northern Rock when their share value fell to the floor! (- A ‘guaranteed’ stop is recommended for full security).

Only ever trade with money you can afford to lose. Of course we all hope you don’t lose the money but you cannot risk money you need for the rent, holiday, car, food, etc etc.