Spread Betting Guide to Trading Forex for New Traders

LONDON, April 4, 2012 /PRNewswire/ --

Offering multiple benefits to traders both new and experienced, foreign exchange is one of the most traded financial markets; allowing spread bettors fixed forex spreads, greater leverage and the potential for substantial gains from small movements in the markets.

In the below spread betting guide, we offer an insight into the world of spread betting the forex market for those new to trading, with the aim of helping you to achieve more profitable trading.

Spread Betting Forex

Spread betting with City Index offers traders an affordable gateway into the world of stocks, shares, equities and currencies.

Forex, also commonly referred to as foreign exchange, retail forex and FX; provides attractive opportunities to traders, even during volatile market conditions.

Spread betting forex requires an initial deposit which is only a small percentage of the total value you wish to trade, offering new trading exposure to a wide range of currency pairs.

Strategy

Your trading strategy should act as a comprehensive guide for you to follow when spread betting currency pairs.

Prior to placing a trade, outlining your personal profit goals, maximum risk allowance (how much you are willing to lose), risk management strategy and how you are going to analyse your chosen markets, i.e. through technical or fundamental analysis, or both; your trading risk will be reduced, as will the potential for losses.

It is common for emotions to get the best of you, especially during volatile market conditions, which can lead to impulse trading. A trading strategy, covering the above areas, can significantly reduce your trading risk.

Analysis

As we mentioned above, part of your trading strategy needs to outline what form - or forms - of analysis you will use to familiarise yourself with your chosen markets. Keep in mind that when trading the forex market, you are trading a currency pair, i.e. two markets.

Analysis is imperative to your trading success; by familiarising yourself with both the technical and fundamental tools, you can analyse and gain knowledge of your chosen pair prior to placing a trade.

For example, through technical analysis, you can analyse the historical price movements of your markets in order to predict their future direction.

In a similar way, by keeping on top of economic news and events, you can analyse your markets and the subsequent factors that can determine their future price movements.

Such preparation, based on analysis of price trends and financial news, will help you to plan your best approach when you place a trade.

Summary

Spread betting forex with City Index offers multiple benefits to traders; both new and experienced traders are offered an easy entry level into a range of markets, such as forex, through the small initial deposit requirement.

The key to success is to research, plan, manage your risk, stay disciplined and follow the news; all of which should be covered through a comprehensive trading strategy.

Learn more about spread betting on foreign exchange rates with City Index.

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

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 trading platform.

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

We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.

SOURCE City Index