Sharing my Spread Betting Trading Strategy: Trading the Dow and FTSE

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There appears to be a growing interest in financial spread betting and on which ways the market will go and most beginner traders keep asking me for help on getting out of bad trades.  So to give my little bit, I'll try and explain my spread betting trading strategy. By the way rule number 1, have a trading strategy and trading plan!

By the way during my first year of spread betting I didn't have a trading strategy, and lost 90% of my account, and during this ordeal of losing you also can easily end up gambling and placing larger stakes to try and recuperate losses, making the losses quicker! Very easy done.

My Spread Betting Trading Strategy


Anyway onto my trading strategy, (note I only trade Dow and FTSE on a longer time scale for minimum 200 pips), firstly I check out the daily chart, what's the current trend?  Looking at the FTSE currently it is heading down, lower highs and lower lows. So the signal here is to 'Sell the market'. The next problem is when to enter? Ideally near to the top of the trend line; in this case, and note the word near; to catch the tops and bottoms on the turn are impossible.

So looking at the chart for yesterday, entering the market at above 5300 was OK.  As it was up around where I have my downward trend line drawn.

Now for money management (rule number 2), because at the end of the day that's what it's all about, not losing too much, and having gains above 50% of trades.  The biggest and most frustrating aspect is getting on the ladder to a successful trade in the first place, without constantly getting your stops hit.  More so now with the high volatility, so at the moment wider stops are the order of the day, for me 50 on the FTSE and 100 on the Dow.

Next; I first trade only ½ stake, and then let the market do its course, and on the way do the usual panicking when 10 – 40 pips down, and wishing I'd entered later… Whatever you do don't add more at this point, it could well be that the market could be changing its trend, and better to take a 50 pip loss at ½ stake.  Hopefully the market goes with the flow and falls, I wait for a 50 pip gain, and then pull my stop loss in to plus 10. I then enter another short at half stake with stop loss tighter at -25 pips. The reason being that should the trade go against me and hits the first stop, I can make the choice of quickly pulling out with a minor loss, and re-evaluate later, or take the gamble the first stake survives and re-enter the second stake at the +50 pip level.

The above is frustrating just to get a step on the ladder, but it does minimize losses.

So you're on the ladder, wait to be 80-100 pips up, and the re-enter with a full stake, set all stop losses to your average opening price, so the maximum you lose now is zero, but if the trend is with you, now you are double staking and profits come quickly, sit back and relax and move your stops to profit and follow the movement.

Hope this is of help and happy trading!
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