Will you make spread betting a living? You, yes, may.

Simon Cawkwell, who has made countless millions of spread bets on stocks, includes highly active spread bettors. Simon Smith is a little cagey about just how much money he’s earned from spread betting on house prices, but he acknowledges that paying off his mortgage has been at least enough for him.

Yeah, most spread bettors will make mistakes and lose cash, but a minority is profitable, this is obvious from a 2016 study when the FCA discovered that 82 percent of retail traders lost cash, which means that the balance of 18 percent would either be breakeven or profitable-about 1 in 5.

Approach spread betting like a business

If you intend to make a living from spread betting, then as a spread bettor, you are, in essence, starting your own company. As such, you ought to approach it like starting a business. It takes a few years for most companies to become firmly founded and reliably and substantially profitable. It is possible that your spread betting company will be no different.

Therefore, for at least a year before intending to draw some money from your spread betting company, you should either have enough funds to carry you, to cover your living expenses, or you should start your spread betting business as a part-time effort while you still have a steady income from another source.
In fact, having enough capital to start your spread betting business is likely to help you succeed, as it will free you from feeling pressure to be successful right from the start on any spread bet trade.

Devise a business plan

Next, a strong business plan is important for you. Part of designing a business plan for spread betting would entail identifying a profitable spread betting trading strategy and following it.

Before you find one that is (A) profitable and (B) you are happy with using, it may take some time to play with different trading strategies.

Choose the correct spread betting firm

Another significant part of your spread betting business strategy is your choice of a spread betting company. Different spread betting firms offer various spreads, various trading channels, various markets and criteria for different margins. It pays to take the time to carefully review the available spread betting firms so that you can find the one that fits your trading needs best.

Picking your spread betting market

Cawkwell, the stock market, and Smith, the home prices market, you might have noted that both of the popular spread bettors called specialized in trading a certain market.

The most active investors of any type focus their trading efforts on the trading of a particular market’s financial instruments. It makes sense, therefore, to concentrate your own trading efforts in the same manner.

If you already have experience in trading stocks or forex, for example, then you may want to take on whatever skill and knowledge you may have in one of those markets and apply it to spread betting.

Alternatively, you may want to blaze a trail in a market that you haven’t previously traded as a spread bettor. Either way, finding a market that fits your trading style is crucial and then learning all you can about trading that specific market.

Two calculations to make for making a living spread betting

In planning your spread betting business, there are a few significant calculations you need to make.

-Set income expectations

If you plan to make a living from spread betting, then how much annual betting revenue do you need to live comfortably or at whatever amount you want?

-Set returns expectations

What kind of return you need from your spread bets on a regular, weekly, or monthly basis to produce that annual income level. The measure must take into account what kind of trader you are: a day trader, a long-term trader, or something in between.

However, you will have to start betting at that level depending on how much money you have available to finance your spread betting business, and then gradually raise the size of your bet stake as your trading account increases.

You will need to try to guess how long it will take you to amass enough trading capital to be able to bet at the level you need to make a living from your trading in that situation.

Accept early losing trades

Good financial spread betting takes time, practice, and effort, just like fine-tuning any business. Right from the start, don’t expect to be a business magician. Be rational instead and just acknowledge that it takes time and learning to become a very good spread bettor

Don’t let you get distracted by early losing trades.
First of all, you’ll always have to lose trades from time to time, no matter how adept you become at spread betting. Not every bet is won by even the very best spread bettors. Second, each losing trade can be a learning experience that will motivate you in the future to have more winning trades.The best way is to simply see losing trades as part of the price of running your business. There are no companies out there running with a profit margin of 100 percent, so why expect yours to be any different?

Take advantage long and short

One of the many benefits provided by the spread betting industry is that you can make money just as easily selling short as buying long from financial spread trading. In fact, by making short selling spread bets, Simon Cawkwell amassed the bulk of his spread betting fortune, betting on stock prices to drop rather than increase.

It will encourage you to take full advantage of all the opportunities in financial spread betting, not just half of them, to learn to be just as relaxed and ready to bet on prices going down as on rising prices. Many investors prefer to purchase rather than sell, more naturally.

To get comfortable enough with selling the spread, it can take some practice to be equally prepared to buy and sell the market at any time. By making a deliberate effort to be on the lookout for sale opportunities, and by always making sure to analyze the markets from both sides, both buyers and sellers, you can speed up your learning and trading capacity in this field.

Bear in mind that the only reason a trader will buy is that another trader is willing to sell similarly, and the selling trader is as convinced that the market price is going down as the buying trader is that the price is rising.

Summary

All profitable firms, irrespective of whether the job is manual labor or market research, are the product of hard work. There’s no reason why you can’t be the next spread betting success story, as long as you’re prepared to do the required work to make your spread betting company a success.