Investors and Spread Betting Aficionados are in their element thanks to the Brexit vote, as the volatile markets have created a vast opportunity for risk and reward.
While long-term investors will probably be put off by the uncertainty and risks surrounding the current market climate, short-term active investors and spread bettors have the potential to earn well if they are astute enough to pick the right trades. While decade long lows have almost become a commonplace today, some investors have lost millions while others have been quick to the draw and made small fortunes. Whether you are one of the unlucky ones looking to recover some of your losses, or an opportunist looking to make some extra money – here are some basic tips to start.
Establish what type of Investor you are
If you are risk-averse and like to wait for your trades to realise their full potential, then long-term futures and low-risk trades are the way for you. However, if you enjoy the volatile market swings and feed off an appetite for risk, then short-term spread betting and post-Brexit markets seems like the place for you. Remember, knowing is half the battle!
Don’t react until you look at the bigger picture
Regardless of whether you are a short-term trader or a long-term one, ensuring you take a long term view can be pivotal in succeeding in the markets. Those who refuse to establish a baseline to work with are often spooked when big market moves occur and run the risk of missing out on either great prospects or losing fortunes on those they could have read better.
Hone in on your best Trading tactics
Traders and Spread bettors who are interested in short-term trading should consider several things during volatile times:
1) Don’t be afraid to wait to make your move until you feel comfortable
2) Trends don’t have to be your enemy. While you should consider testing the trade first, there could be good merit behind it.
3) Use market indicators like the Volatility Index to bench your investments and choose your targets
4) Set stop losses before you even start trading and remember your limits so you don’t blow the bank in volatile times
5) Settling is not losing, so don’t be afraid to do it if your appetite for risk suddenly changes or you think that the market is getting ahead of you.
Have a plan and don’t change it unless you are sure
Before you start dabbling with your money, be sure to set clear objectives of what you want to gain by spread betting. Explore different scenarios for both the trades you are interested in and market reactions to better read what may happen an ensure you don’t panic. Be sure to think about your total liquidity, risk aversion level and any tax associated with wins you may receive for your perfect plan.
Recognise all your available options
Distinguishing all the resources and tools at your disposal and learning how to use them can make things easier. Have a look at what is out there and keep up to date with market news, current research and any strategies that may help you make the best decisions to get the maximum profit you can get.