Market Trends and Financial Spread Betting

Trading on market trends is another common trading strategy used by spread bettors, who jump on a market bandwagon after a combination of factors are triggered and effectively ride the wave of price movements. This takes place over the course of the trading day rather than a few minutes (as with scalping), and renders transactions costs minimal while presenting potentially wild gains.

The perfect scenario for trading on trends appears when an announcement is made or a news story breaks and the markets just begin to react to that announcement. While the first few minutes can be a volatile period, identifying the start of a price trend in either direction can give the trader a clear indicator of which position to adopt, and takes advantage of your individual dynamism over larger funds to adopt savvy but early positions. In contrast to scalping, this kind of strategy allows you to open a position slightly ahead of the rest of the market, to capitalize on the potentially significant reaction of an index price as the market moves on-trend.

Of course, this is just the second potential spread betting strategy, and there are countless others and variations that traders can implement. Ultimately, it is up to the individual trader to determine what works best for them, but devising a solid trading strategy remains a key element in profitable, consistent spread betting.