Spread betting ftse 100 tips and life

Create a trading plan just as you would a study schedule. Detail every aspect, so you know exactly what you are doing. Even if you plan on trading casually, it is still your money you are risking. Have a Solid Risk Management Plan Most trading platforms have risk management tools such as stop-loss orders and limit orders.

Ensure you take advantage of all the risk management tools available. You should also be fully aware of where all your money is going. Are there any hidden fees? What happens if your trade does not work out? Before making any trade or investment, calculate the reward and risk ratio. The best ratio is Never make a move on anything less than Study All the Charts Price action charts will indicate how a market may behave on the day.

You should also consider the FTSE intraday timeframe chart, which both professionals and beginners use. The chart allows you to place resistance and support lines so you can see any patterns that support your strategy. Use Technical Analysis to Find Signals and Indicators Study all the technical analysis tools available to you to identify any signals and indicators. Your signals highlight any trends the FTSE might be in, such as momentum and reversal.

Your indicators confirm if these signals are legitimate. They include: Various averages such as the moving average to find the direction a market is moving, EMAs to determine the legitimacy of a move and MACDs, which see changes in two moving averages. Stochastic oscillator which compares the closing price of a stock over time to identify its trends and strengths. Fibonacci retracement which finds the moment a market will change its trend.

Relative strength index to find warning triggers for dangerous price movements. Standard deviation which helps measure the size of price moves. You can also set alerts related to specific criteria, so you will only be alerted once all the requirements have been met. Keeping up to date with economic events and the daily news releases from FTSE companies will help you understand the market better and prepare you for any market changes.

The index first appeared in January and had a start value of 1, With various mergers, take-overs and folded companies, the list has changed completely. For Tesco, unlike most of its peers, UK sales saw an increase of 0. The gains were driven by a Its general merchandise division which for so long has been a drag, continued to improve, with clothing and home sales increasing 3.

The rest of the sector has also underwhelmed today, with JD Sports and Next floundering at the bottom of the FTSE , although JD Sports losses are more to do with the fact that chairman Peter Cowgill sold 10m shares at an average price of Taylor Wimpey has also slipped back ahead of its numbers which are due next week. Negotiations are still ongoing and there is interest from other parties, with Discovery said to be interested in a joint venture. US US markets opened slightly higher, after December PPI came in slightly below expectations and weekly jobless claims edged up to k at the start of the year.

The Nasdaq appears to be leading the way with chip stocks getting a lift after Taiwan Semiconductors upgraded its chip growth forecast for , helping to give the rest of the sector a lift, with Applied Materials and AMD coming in behind it. Delta Airlines has seen its shares rise after reporting Q4 profits and revenue that came in ahead of expectations. Investors will also be paying attention to Fed vice chair nominee Lael Brainard at her nomination hearing, and her views on the course of monetary policy over the next few months, particularly over the pace of the rate hike pathway.

Consequently, the US dollar index has continued to slip back, falling to a two-month low. The US dollar losses have been across the board, with the commodity currencies performing the best, with the likes of the Australian and Canadian dollar doing well. The prospect that inflation could be starting to top out offers encouragement and a little more certainty about the longer-term growth outlook, bringing more certainty around manufacturing costs.

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The FTSE consists of companies, of which 10 make up about 45 per cent of the index value. The German Dax consists of 30 stocks, representing the creme-de-la-creme of German commerce and industry. Together, they are considered the two leading stock indices in Europe. I realised that there is a statistical correlation between the two stock indices significant enough to bet on.

Why the FTSE? Good question as there are so many other things to trade, and the trade setups that we take do apply to other markets, but some traders find Indexes easier to trader compared to Forex. If you take time to work it all out then yes you can do really well out of Forex pip for pip def more than the Indexes, but the learning period is def longer and harder as you have to develop a six sense as to what the big banks are up 2.

You also need and this is where most new trades blow even more money to know about cross currency analysis and yes once you understand how that works you can make money. It is my thought that this offers the new trader the best chance of learning trading basics and then yes once you learn your own rules you can trade anything you like.

Spread Betting the FTSE Practicalities The FTSE index benchmark can be stagnant for months moving in a range of maybe 40 or 50 points but in turbulent market conditions it can move by over points in a single trading session. You can spread bet the FTSE using either the daily rolling bets or futures. Daily bets are more suitable for short-term trades and comes with very tight spreads — typically at just 1 point.

As the name suggests daily rolling bets can be rolled over from one trading day to the next, subject to a small financing charge each time this happens. Longer term trading views can be taken using the quarterly stock index futures.

The spread for futures is wider but these contracts do not incur daily financing charges. Initial margins usually work out to around 40 times the stake for both FTSE daily bets and futures. If you are considering a medium or long term trade you will need to utilise fairly wide stops to take account of the day-to-day market fluctuations.

I noted that at about 4. The adjustment took 25 points out of the FTSE. This is normal and there is no net effect on your position. One of the main reasons is the tight spread. However price is not the only advantage the FTSE offers. Consider: it trades during the European working day — so no need to become a night owl it moves enough i. When the markets are open, if you have a variable spread betting provider, you will find some of the smallest spreads on this index.

The result is an instrument that can update several times a second and can be traded nearly 24 hours a day. Say that your spread betting company is quoting When it reaches To work out how much you have won, you must figure out the point difference that you have gained. Your initial bet was at When you closed your bet it was at the selling price of That means the total number of points you gained was This works out to Some successful betters even lose more often than they win, but make a profit because they make sure when they lose they close the bet and cut their losses quickly.

Say that instead of going up the FTSE went down and you decide to close the bet at That means you open the bet at Your total losses were However that may not be the case. If you are looking to hold your position open for a few weeks or event months, I suggest you look at thequarterly contracts — available from the Indices — Capital Spreads UK Indices screen.

The quarterly contracts, which expire in March, June, September and December have a slightly wider spread but they do not have a financing charge so — if you are planning on holding a long position open for a while, they may work out more cost-effective. Example: Assume now that you want to take a view on a futures spread trade.

The quote you get for a spread bet finishing in three months time is Although this is a long-term futures bet, you can close it at any time, and you choose to cash in the next week, when the index has shot up to That means you gained a total of With the FTSE being relatively stable, that means price fluctuations are not very wild by and large there is always the exception and therefore neither are your chances to make large gains in a single trade but of course this also means that this reduces the possibility of sudden, sharp index movements catching you by surprise.

The other downside to trading the European Indices is that beyond a certain time of the day, they stop being independent and start to wait for the USA markets to open. They then follow what the USA markets do until their close. This makes the FTSE less of an ideal benchmark of how the UK economy is faring given its relatively narrow breadth and heavy dependence upon banks, oil companies and miners.

And why do they trade these key numbers are they thinking people who hold a FTSE company may decide to sell when the index itself reaches a key number? Answer: No not just random markets. Round numbers, pivots, support and resistance all are real psychological areas where traders take profits and open new positions.

Madness of Crowds. Pit traders know it, day traders know it and the institutional program traders know it. You can believe they are random or you can believe they are traders fear and greed. It is a market capitalization index, which means that it includes the largest companies on the London Stock Exchange. All this really means is that the shares used for calculating capitalization are available on the open market.

They adjust to the constituents of the index every quarter. Companies from the FTSE , which covers the next largest companies, can be promoted into the if they have a capitalization greater than the top 90 in the FTSE. This restriction ensures that there is less promotion and demotion than otherwise, which might foster uncertainty. The 10 largest companies in the FTSE include three oil and gas companies and two mining companies.

Because the FTSE is so well known and so heavily traded, you are sure to find that any spread betting company lists several available bets — a rolling daily one and several different future-based bets. There is also no shortage of advice to be found on the Internet on how to trade the UK The best advice is to read this but make up your own mind. It is common with market indices that they fluctuate a lot, and the UK is no exception. This is perhaps why it is one of the favourites among spread betters.

Another reason would include the familiarity that many traders feel to the product. But anyone who says that the stock market is a great place for long-term cash as it will always beat any other investment should face up to the fact that they are talking averaging out over a very long-term. The actual figures suggest that the market returns are not so great. Over the last 10 years the total return from the FTSE index averages out to 4. Along with small-cap shares, the index has been disappointing for a buy and hold investor.

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