As I write this, my head is hurting and my wallet is empty. Spread betting has cost me almost PS30,000 in the past four weeks. I bet for an hour every day, five days a semaine. This means that I was able to spend around PS1,500 per hour. This is quite a large sum of money. It’s actually not as bad as it seems. Luckily, I was betting on demo sites of spread-betting companies. These simulations allow you to practice your betting skills before you invest real money. I’m not a financial wizard, but I wouldn’t have become rich if I was. The fact that I was able to waste so much money so quickly begs the question: If spread betting seems so simple, then why is it so common for people to get totally wiped out so quickly?
Advertising for spread betting is becoming more common in investment and money management publications. The weekly full-page color ads are taken by four to five spread betting companies in the magazine I subscribe. This is more than any other type advertising. Spread betting ads are common in many weekend newspapers’ business sections. They will likely soon be appearing in the personal finance section. Spread betting may seem deceptively appealing to many savers. Spread betting could be a tempting option for many savers. After all, money in a bank or shares will only give you about five percent a year before taxes. Spread betting, which can be done well, can allow you to make ten percent per week or five hundred percent per year. This is completely tax-free. Spread betting can earn you in a year what it takes to make the same amount with other investments.
Spreadbetters bet on price movements in any market, including individual shares, currencies, commodities, and whole markets such as the FTSE or Dax. The spread sbowin betting company makes the most of the money they make by putting an additional spread about the price at which the item is being sold or bought.
Spread betting seems to offer many benefits over traditional investing.
It doesn’t require you to purchase anything. This allows you to place bets on price movements without needing to own the underlying assets, such as shares, commodities, or foreign currency.
There is no tax on shares you sell or trade. However, you must pay income tax, stamp duty, capital gains, and capital gains taxes when you receive dividends from a bank. Spread betting is not your only source of income and a full-time job.
You have the option to go long or short. Spread betting allows you to gain as much regardless of whether prices rise or falls, provided you correctly predict the direction. You need the price of your investment to rise before you can make a profit.
You can place two wagers on a rise or a fall at the same moment- For example, if the FTSE is trading at 5551-5522, you can place one bet that it will rise, and one that it’ll fall. These bets are only activated when the FTSE moves. If it begins to rise, it triggers your bet that it will go higher. If it falls, your bet that it would fall will also trigger. It can appear that you will win, no matter what the weather.
Great leverage If you place a bet of say PS50 a pint (a pip is the minimum price you can wager on), you could win up to four or five times the original bet, depending on whether the price changes in the right direction. You can win even more with a good bet.
Wait for the breakout – The breakout is when prices on many stocks, currencies and commodities experience periods of stability that are followed by sudden movements up or down. Spread-betters refer to this as the breakout. A bet can only be activated when the breakout occurs.
Loss limits You can place conditions in your bet to prevent losses exceeding your set level, should you lose.
Mid-flight Adjustments can be made. With most bets (e.g. on horse racing or roulette), once the race starts or the croupier calls ‘no more betting’, you must wait in vain for the outcome to find out if you won. Spread betting allows you to cancel your bet at any moment. Spread betting allows you to take your winnings if you are ahead. If you are behind, you have two options: cut your losses or wait for things to change so you’ll be back up.
Spread betting has all the properties that make it easy to make some money. It’s only.
According to industry estimates, ninety percent of spread-betters will lose all or most of their money within three months. Another eight percent make decent amounts of money and two percent make it big. At one presentation by spread betting companies, the salesman revealed that more than eighty percent of their customers had lost money. Professionals lose six out of ten bets. They can increase their wealth by managing their losses and maximising the returns when they win.
What can go horribly wrong
Spread betting seems to have many reasons spread betting is so powerful in destroying most practitioners’ wealth.
Companies want you to lose. Upon opening a demo account or real account, you’ll get many phone calls from spread-betting companies asking for assistance. This is the best customer service. Many people who contact you will tell you that they are just trying to help you and that they don’t mind if your company wins the spread. Others will tell you they want you winning because the more you win the more spread-betting companies will make. It may make you feel good and convince you that they are honest, trustworthy, trustworthy, supportive, and you should use them for your betting. It’s also a lie. The spread might be a good way for the company to make some money. You’re placing a lot of money against the company, so they want you to lose big. In fact, I have seen many companies alter the terms of their websites to increase the likelihood that users will lose. Spread betting companies are not good friends. Spread betting companies win more than you lose. It’s as simple as that.
It is difficult to break even. If you place a bet of say PS50 a pint and the price goes the way you want it to, the spread betting company will take the first PS50 you win. To win your PS50 back, the price must move in the right direction by two pips. You will also need to earn three pips to get your PS100, double your money. If the price moves in the wrong direction three times, your original wager is lost and PS50 loses a pip. This will result in a loss totaling PS200. That’s four times your original stake.
Large losses can occur – In most gambling, you only have to lose the amount you wager on a horse, blackjack, or roulette. Spread betting allows you to quickly lose more than you bet. My PS50 bet was not enough to stop me from losing over PS800. Your bet can yield both incredible gains and painful losses, because it is leveraged. It’s often the latter. A small number of bets, such as PS5 or PS10 a pips, can lead to a false sense security for betters. They only realize the risks they are taking when their losses exceed five to ten percent of the original bet.
Spread betting leverage is an attractive idea that allows you to get rich, but also gives you the possibility of getting poor, which many people overlook. ”
It is possible to waste thousands of dollars on courses and systems During a free spread-betting seminar, we were encouraged to sign up to a weekend course that teaches us how to spread the bet. The normal cost of this course would be around PS6,995, however, the special offer was for the first five participants who signed up at a price of PS1,997. Many courses are offered by gurus, as well as gurus, offering their spread-betting systems, webinars, and other advice. There must be many people willing to teach others how spread betting works. However, I found all the information you need and more on the internet. One specialist stated that you shouldn’t waste your money on “Guru” books written by experts. These books are worthless and worthless on the paper they are printed on. If they’re really successful, nobody sells secrets trading methods. These guys don’t trade secrets, so they write books.
The bobbing about is what beats you – It’s often reported that the price for gold has risen a few dollars per ounce, or that the FTSE has dropped by a hundred thirty points, or that the pound has risen two cents to the dollar. These reports can make price movements in financial instruments seem smooth, either up or down. But, prices of stocks, currencies, commodities, and stock markets rarely move in straight lines. They fluctuate every few seconds. If the FTSE is at 5540, and you correctly place a bet PS50 a pip that it will rise to 5545, you may not win PS200. It might fall to 5535 or lower between 5540 and 5545. To avoid losing too much, you can set a stop loss at 5536 or 5535. If the index moves upwards as predicted, your stop loss will kick-in and you’ll lose PS250 to PS300. To see if my bets were correct, I placed more than 100 bets. I lost on about 80 percent, despite being right. This was because of the fluctuations that triggered the stop loss. The index actually moved from the place it was to the one I predicted. This is a strange situation in which stop losses can make you lose when you should be winning. If you don’t have stop losses and things turn in the wrong direction you can lose everything.
It attracts losers During the spread betting seminars that I have attended, I was shocked at the number of low-paid workers (waiters, porters and kitchen staff) who decided to try spread betting because they believed it, other than winning the Lottery lottery, may be the only way they can make any money. These individuals will be betting with very limited life savings against highly skilled financial service insiders with vast experience, years of knowledge and deep pockets. It is easy to predict who will win.