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Financial Spread Betting is an investment instrument that allows traders to buy and sell assets based on their projections of whether that asset will rise or fall in value. Spread Betting strategies, as a result are required to make these informed decisions and there is a wide variety of approaches that are commonly used in the markets today._x000D_
Many of these approaches are technical in nature. That is, traders view and analyze historical price activity on a series of charting graphs. Patterns and trends are then identified so that high probability trading scenarios can be constructed. Other strategies are more reality based, or ג€fundamentalג€ in nature which essentially means that the trader is required to closely watch news headlines and economic data for clues with regard to the future price of an asset. Here we will assess a few of the most common Spread Betting strategies._x000D_
Trend Following
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One of the most common sayings in the market is that the ג€trend is your friend, stay with it until the end.ג€ Traders employing trend following strategies tend to believe that the majority of the market’s momentum is already established and fighting that momentum is an exercise in futility. Trend following is also a common method for new traders because trend direction is generally easy to identify and unlikely to make a surprise reversal. For the most part, an uptrend is defined by the appearance of higher highs, accompanied by higher lows. When this condition is in place, buy positions can be established. Conversely, Downtrends can be seen when lower higher are accompanied by lower lows. When these conditions are in place, sell positions can be established._x000D_
Range Following
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Another commonly employed Spread Betting trading strategy is Range Following, which can be seen when prices are caught in a clearly defined range without the occurrence of significant new highs or lows. In these cases, traders will look to define the ג€rangeג€ by looking at areas where buyers and sellers have historically entered into the market. Once an important ג€lowג€ is identified, traders will look to enter into buy positions, on the assumption that prices are likely to reverse higher. Conversely, when prices rise to approach an important ג€highג€ traders will look to enter into sell positions, as this is likely to be where the rally is complete. Range traders prefer this method over trend following because they feel the strategy enables them to enter into the market at cheaper price levels._x000D_
News Following
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An entirely different approach can be seen with traders to look to enter into new Spread Betting positions based not on charting activities, not on news or economic releases. These instances can vary widely and involve news items like disruptions in oil supplies, increases in metal production, political instabilities or major changes within a country’s central bank. In addition to this, economic releases are also given a high level of importance. These releases include items like inflation figures, manufacturing production, trade balance data, retail sales figures, or Gross Domestic Product (GDP)._x000D_
In general, economic releases are scheduled in advance, so all traders will be aware of these releases before they become available. News events, however, are much less predictable and will often occur without notice. Because of this many News traders tend to employ short term Spread Betting strategies so that they can capture the main market moves of the day before other investors become aware of the latest developments.
