What is the Correct Amount to Stake When Spread Betting?

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Aug 03, 2011, 07:10 ET

LONDON, August 3, 2011 /PRNewswire/ --

Spread betting should not be seen as a way of generating instant cash with no effort. It requires as much research, planning and patience as any other form of financial speculation.

With this in mind, the most successful traders are ones who make small regular profits. 'Traders' who risk everything on a single trade are nothing more than gamblers. Playing the long-game may not be an exciting way to speculate on the markets, but it tends to be significantly more productive.

Some trading experts believe you should not risk more than 3 percent of your capital on a single spread bet or CFD trade. This means if you had £5,000 in your trading account, a single trade should never cost you more than £150.

Only you know if this particular approach is appropriate for you, but having an idea of exactly how much you are content to lose on a trade can be invaluable. After all, the fewer decisions you have to make in the heat of the moment while on the trading platform, the better.

To learn more about spread betting and CFD trading with City Index visit:

http://www.cityindex.co.uk/

Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.

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About City Index:

Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index (http://www.cityindex.co.uk/) trading platform.

As a group, we transact in excess of 1.5 million trades every month for individuals in over 50 countries worldwide. We provide access to a wide range of instruments including margined foreign exchange, contracts for difference (CFDs) and, in the UK, financial spread betting.

We constantly look to widen the range of assets we offer, improve the performance of our platforms and expand the range of services we provide. The result is that our customers benefit from innovative trading tools with transparent pricing, competitive spreads, iPhone™ trading platform, and a high standard of customer service and support.

Visit http://www.cityindex.co.uk/spread-betting/start-spread-betting.aspx to open your account.

SOURCE City Index