Some strategies in the trading world work best for those who have been around long enough and have the expertise in identifying the price movement, and spread betting strategies is considered as one of them.
There are so many strategies that fall into this category and here are a few of them.
Spread Betting Strategies – Newbie
These strategies are popular among new traders:
Trend Following Strategy
This is one of the most popular strategies that apply by many new traders. The main idea of this strategy is to look for the trend direction that will determine position entries.
This strategy is pretty straightforward, where the trader will look for the charts of a specific asset. If the chart shows that the asset keeps going up, then this is the sign of an uptrend, and traders tend to put a buy position.
On the other hand, if the chart shows that the asset keeps going down and down (downtrend), then most likely they will put in a sell position.
Range Trading Strategy
When the traders identified the levels of support and resistance in a specific asset and they believe that this level will keep that way in the future, they can use range trading strategies.
In this strategy, the traders will set a buy position whenever the price is close to support. And on the other hand. if the price is close to resistance, the trader will set a sell position.
Because it allows traders for easy stop loss placement, these spread betting strategies are pretty popular among many traders especially new traders.
Spread Betting Strategies – Advanced
These strategies are usually used by traders who have been trading for some time:
News Trading Strategy
The main idea of this strategy is that the trader should look for news headlines. As well as other economic activity that is on the news before they make a trade.
This strategy relies on the fact that price activity is affected by many things. Including positive or negative news headlines as well as economic data release or even political issues.
The trader must be able to interpret the news. And use it to predict the market response to price activity. So they can make the best trading decision.
Structure of the Entry and Exit Strategy
This strategy does live up to its name as part of spread betting strategies. In this strategy, the traders try to balance the entry and exit.
The profit and loss level will be pretty effective if they know how to use it. The traders basically try to figure out his or her win rate and place their bet with it by choosing the amount of money.
They will get per winning and how much they are going to lose per losing bet.
Reversal Trading Strategy
Reversal trading works almost similar to trend following. In this strategy, the trader does not look for uptrend or downtrend. Instead, they are looking for a pattern on the chart.
Here, the traders looking for trends that are overextended and ready to reverse. If the trend shows the sign that it will go up, the traders will start to buy the assets and sell it out when the chart is ready to go lower.
It is not easy to use this strategy. Because the trader has a hard time identifying the reversal point. But with enough experience and tools, this strategy could lead to bigger profits.
Spread Betting Strategies – Final Thought
If you want to run spread betting strategies on your currency trading, you have to check whether spread betting is legal or not in your country. It will be better that you collect every currency trading information before getting into trading.