Trading Timescales and Styles
Before we look at opening a spread betting account and placing a first spread bet in the next section, it’s worth reviewing (in brief) the various trading styles that you might adopt when spread betting. There’s nothing to say that you can’t try your hand at each one – in turn or in parallel – to see which style is best suited to you and your circumstances.
I’ll state at the outset that, even when spread betting, my preferred trading style is the longer-term position trading style that has something in common with traditional “investing” and which will appeal to you if you come from a traditional investment background with a traditional investment mindset. But position trading is not the only trading style, and there are other trading styles that are practised over different trading timescales.
I’ll also state at the outset that despite usually taking the “long view” on spread bets, both in the directional sense of buying “long” and in the timescale sense of holding for the long term, I am more inclined to trade on the basis of technical price action than on an assessment of company fundamentals. It doesn’t mean that you have to do the same, and in the remainder of this section I’ll review your options for trading different styles over different time periods.
Before we move onto the nuts-and-bolts of opening a spread betting account and placing a first spread bet, it’s time for you to decide on your trading style(s) from the ones described above. Or is it? There’s nothing to say that you can’t try your hand at each one – in turn or in parallel – to see which style is best suited to you and your circumstances. And if you’re anything like me, you might decide to run with different trading styles in different spread betting accounts that you hold with different spread betting companies.
In this section at the various trading timescales from ultra-short-term day trading, through swing trading, to longer-term position trading. I’ll introduce the ideas of trading based on company fundamentals, on technical price action, or on both as a techno-fundamentalist trader.
The most important thing to remember is that your trading style is up to you. Don’t let the spread betting companies bully you into assuming the “day trader” mentality just because of their tight spreads and fast execution (nice though those things are). And don’t let the spread betting companies and other trading platform providers lure you into thinking that it’s all about currencies and commodities – by offering bonuses to trade those – when in your heart you know that you have a better grasp of understanding individual equities (i.e. stocks and shares).
