To Spreadbet or Not To Spreadbet Forex? - That is the Question!

Hi Traders,

Often I am asked whether it is better to trade Forex using a Spread Betting Account or a traditional Forex Broker Account and my answer is always - that depends upon several factors and they are:

• If you are not yet a consistently profitable Forex trader then stick to a Forex Broker micro-account/mini-account.  This allows you to trade smaller lot sizes and stay trading for longer and costs less to re-seed your account should you have to, whilst you are learning to trade Forex profitably.

• If you are a consistently profitable and you are making sufficient money in the Tax year to have to declare your profits to the UK Tax Man (HMRC) - i.e. are you liable for Capital Gains Tax, then you may like to consider trading in a Spread Betting Account, the profits of which are currently tax free.  Everyone has a Capital Gains Tax Allowance of £10,100.  So currently you would need to be making more than £10,100 and then the additional figure would be taxable at 18%, for 2009/10 tax year.  (These figure may change after Weds 24 March 10 - Budget Day)

• The next issue to consider is whether you have sufficient funds to place in a Spread Betting Account.  Most people open a Spread Betting Account with insufficient funds and then proceed to lose it all.  To stay in the game you must be able to withstand a run of losing trades and also apply Fractional Money Management to your trades, so that you are not risking more than 1% of your account on any one trade.

• Spread Betting Accounts often have restrictions on the smallest position size you can take, so you need to make sure you are able to operate your fractional money management and not risk more than your allotted account percentage on any one trade by having sufficient money in your account.

• However, if you are sufficiently capitalised, consistently profitable, making more than the current UK Capital Gains Threshold and also a UK taxpayer then it may be advantageous to trade Forex using a Spread Betting Account.

• One useful aspect of Spread Betting is that you can then trade Forex Quarterly contracts (like a Futures Contract), this is useful for longer term position trading and cuts out the daily swap or spread at daily rollover.   You can also set up your accounts to automatically rollover these types of contract at each quarter end, if you so wish.

The next question I am then asked is who would you recommend for a Spread Betting Account?  I have two Spread Betting providers that I favour they are:

• IG Index - minimum spread bet size is £0.50 a point
• Capital Spreads - minimum spread bet size is £1 a point

Both have user friendly platforms and good customer support.

IG Index also offers their Trade Sense beginners course and introductory period with minimum spread size of £0.10 for weeks 1 - 2, then £0.20 for weeks 3 -4 and then £0.50 for weeks 5 - 6, once you opened an account with them.

Capital Spreads also offers free seminars to help the novice Spread Better, through to Trading Strategies and Advanced Trading.

You will still need to plan and keep tabs of your trades in your chosen charting platform such as MT4 which tend to have better analysis tools than Spread Betting Account providers, but it is fairly simple to have both applications open at the same time to set up your trades.


A Top Forex Trading Tip is to make sure you have the selected Spread Betting Account Dealing Desk Telephone Number written down somewhere accessible and also programmed into your phone so that you can mange your trades should you have a laptop or PC crash on you.

I hope that helps to answer those questions.

Great trading

Martin

www.forex-crazy.com

How To Become A Consistently Profitable Forex Trader - My View

Hi Traders,

One of the best ways to become a consistently profitable Forex trader is to do the following:

1. Take responsibility for your own mistakes and actions.
2. Be accountable to someone for your trading results.
3. Learn about Support and Resistance in all its guises.
4. Learn how to conduct Top Down analysis of a currency pair.
5. Get yourself a Forex Strategy.
6. Back test each and every Forex strategy or system 1000s of times before trading them in a live account.
7. Trade in a Demo Account before trading Forex in a Live account.
8. Keep a record of your trades (excel spreadsheet) and keep a Trading Journal noting your progress, your reflections on your trading and how you feel.
9. Take PC or laptop screenshots of your trade setups and  their progress to completion.
10. Learn to fully plan your trades in their entirety and then trade that plan.  Prior Preparation Prevents Poor Performance.
11. Adopt good money and risk management.
12. Find yourself a successful Forex Tutor or Mentor - this will be money well spent and will fast track your learning journey.  Attend their Forex classes/seminars/workshops and soak up all their knowledge.
13. If you have a run of losing trades - then stop trading, take a break and re-asses and note your findings in your Journal.  Put the problem right once you have identified it.
14. If you are struggling to find a trade then the market is probably consolidating, so go do something else!
15. Be patient and let the trade set ups come to you, don't force it.
16. Forex can be addictive so try not too let it impact upon other aspects of your life and don't sit there staring at your screen all day watching every pip movement.
17. When you do start trading in a Live account do yourself a BIG favour and start off trading in a Micro account.  If you blow it up you should be able to reseed it, you probably won't be able to do that in a Normal trading account.
18. Once you are consistently profitable in a Live Micro Account then start to scale things up slowly.  When you are ready (proven track record in Micro Account) move upto a Mini-Account and so on.  Trading a Normal account with Large Lot sizes is significantly different 'emotionally' to trading a Demo or Micro account.
19. Make sure your account is sufficiently funded. You should not be risking more than 1% of your account on any one trade and at a max total  of 3 - 5% for a Micro account, if you really must.  The point is when you make a mistake, if your account is sufficiently funded and your are controlling your risk, your account will survive to allow you to trade another day.
20. Use fractional money management to determine your position size based upon the number of desired positions, your account size and the Reward : Risk Ratio for that trade.
21. Do yourself a favour and employ a Stop Loss at all times (at least until you become a seasoned Forex Master and your strategy allows you not to do so, which you will have, of course, back tested!)
22. Network and link up with other Forex Traders and exchange ideas online - Skype is great for this. Trading with other like minded people is also a great way to learn as you swap knowledge, ideas and trade setups.
23. Enjoy the fruits of your labours.

That is just a quick overview of many of the essentials, if you want to know more then grab my free e-book which goes into greater depth.  I wish you every success on your Forex quest.

Martin
www.forex-crazy.com

Forex Trading Workshops London UK - 14th - 15th Feb and 16th Feb 2010

Forex Seminars and Workshops in London UK

We try and keep you informed about forthcoming recommended Forex Trading Seminars & Workshops in London UK:

Learn How To Trade Forex Here:

Forex Workshops in London UK - 14th to 15th Feb 10 & 16th Feb 10

BIG NEWS: Renowned Top Forex Trader Sunil Mangwani is coming to the UK in February 2010 to run 2 Forex Trading Seminars/Workshops in London including Live Forex Trading - he is brilliant!  If you really want to get on the right path to learn how to trade Forex or improve your trading then these are Must Attend events.  Sunil doesn't get to the UK very often so make the most of this opportunity.

14th - 15th Feb 10 - Basic Forex Seminar & Live  Forex Trading Workshop (2 Days)

16th Feb 10 - Advanced Forex Seminar/Live Forex Trading Workshop (1 Day) - Learn a complete Hidden Divergence Forex Trading Strategy.

To secure a provisional place click HERE and leave your details today, by doing so you will qualify for a months Free access to Sunil's Live Forex Trading Room on completion of payment. 

The cost of the 2 day Basic Forex Seminar / Live Forex Trading Workshop is just £399  - an absolute bargain!!  There is an early bird discount reducing the cost to just £349 if you register early, CLICK HERE for details on how to obtain your discount now!

The cost of the 1 day Advanced Forex Seminar/Live Forex Trading Workshop is £799.  There is an early bird discount reducing the cost to just £749 if you register early (by 31 Jan 10), CLICK HERE for details on how to obtain your discount now!

• IMPORTANT:  These Forex Trading Seminars/Workshops will be limited in numbers and will sell out fast so if you want to secure your place send an e-mail to support@forex-crazy.com with the heading 'Forex Seminars' and include you name in the text and we will send you the link to register.
  

  Sunil Mangwani is an expert on Forex Trading and is the course instructor.

To see the 2 Day Basic Certificate Forex Seminar content and details just   CLICK HERE  

To see the 1 Day Advanced Certificate Forex Seminar content and details just  CLICK HERE

TRACK RECORD – Trading 1 mini lot on the EUR/USD on the 1 hr timeframe from 1st January 2007 to 31st December 2008, the Advanced Certificate technique alone has banked 30478 pips and increased the trading capital from $10000 to $40318.

Our (Forex-Crazy) experience of these Forex Trading Seminars & Live Forex Trading Workshops is that you will also learn a lot more than the above and be able to bring real discipline to your Forex trading, by learning:

• how to identify low risk high probability trades
• how to plan the trade and then trade the plan
• when to enter a trade and with what position size and number of positions.
  
• when and how to scale out by taking profits at predefined levels for multiple positions
• when to let your winning trades run or when to close them out.

So don't delay, secure your provisional place today by clicking HERE and leaving your details or send an e-mail to support@forex-crazy.com with the heading 'Forex Seminar' and include your name in the text.

For more details on Sunil Mangwani:  click here

So come and join us and learn how to trade Forex like a pro!