There are several things that you should consider when opening a spread betting account. Some of the main factors include the size of the spread and the size of your starting bet. If you are a beginner at forex trading you may wish to find a company that offers a 10p stake per point or pip to begin with.

Many spread betting companies will offer this alongside training to begin with for a number of weeks, and they may also offer practice account which enables you to place practice bets without actually risking any of your actual trading account. You may find that some spread betting companies will offer a slightly larger spread to beginners and also will insist on stop losses being placed to protect your bets and position in the market.

Choosing the best spread betting company – what to consider

Have a look at each company website and see what each spread betting company offers. You may also wish to consider the exact details of the training they can offer you if you are a beginner.  For example, spread betting companies may offer you an eight week trading programme for a 10p stake per point while you learn the basics of trading, and then your stake may automatically increase to £1 per point at the end of the eight weeks.

You should also assess how user friendly their trading platform is, the size of stakes required in order to trade, and the size of the spread that the company will offer.  Some spread betting companies also offer cashback by way of a free cash deposit into your trading account when opened.  These offers vary from company to company, therefore it is worth comparing companies and finding one that you are happy with.

The size of the spread

This can be from between 1 to 5 points of pips, depending on which spread betting company you use, and your level of experience in spread betting. If you are new to spread betting the you may be offered a wider spread of points. This will affect the amount of profit that you make on each bet or trade, therefore it is essential that you know this before you start trading.

User friendly spread betting platforms

You will use the trading platform to set up and monitor your trades, to choose your markets and set your charts, and apply any tools that you wish to use on your charts to allow you to manage your trades. Find a trading platform that is easy to navigate and offers you access to the markets that you require.  Spread betting brokers vary in size, and the larger the company the better, size does matter in terms of spread betting, and a larger company will offer more markets for you to trade in.

Size of the stake required

If you are a beginner, you may wish to begin trading with small bets until you become proficient in using your trading platform and the tools it provides. Most spread betting companies will offer a comprehensive trading platform, which allow you to bet with small 10p stakes for a set period of time until you complete the training modules offered. More experienced traders can trade with larger amounts per stake, usually ranging from £10 to £100 upwards per point or pip.

Training offered for new traders

New traders will need to learn how to place and close a bet in their chosen market and how to place stop losses in order to minimise any losses. Stop losses can also be moved during trades to lock in profits. The majority of spread betting brokers will offer training to cover these basics. You will also need to understand charts and the differences between them, how to view and interpret the relevant charts for your chosen market.  You will also need to decide the timescales of your trading.  You can day trade, intraday trade or keep trades open for longer periods of time depending on your preferred trading style.

If you are a new trader you may also wish to develop a trading strategy, and these are not normally offered by spread betting companies. These can be found online with some research and will prove invaluable to you if you do not want to lose all of your trading bank.  With spread betting the markets can move very quickly, and you can lose more than your initial stake.  If you have any concerns about spread betting, you should seek independent advice from a professional financial advisor.